Multiple Choice Questions
1. A factor that causes or leads to a change in a cost or activity is a(n)
a. Slope.
b. Intercept.
c. Driver.
d. Variable term.
e. Cost object.
2. Which of the following would probably be a variable cost in a soda bottling plant?
a. Direct labor
b. Bottles
c. Carbonated water
d. Power to run the bottling machine
e. All of these
3. Which of the following would probably be a fixed cost in an automobile insurance company?
a. Application forms
b. The salary of customer service representatives
c. Time spent by adjusters to evaluate accidents
d. All of these
e. None of these
4. In the cost formula, the term $51,400
The following cost formula was developed by using monthly data for a hospital.
Total cost = $51,400 + ($125 x Number of patient days)
a. Is the dependent variable.
b. Is the variable rate.
c. Is the intercept.
d. Is the independent variable.
e. Cannot be determined from the above formula.
5. In the cost formula, the term $125
The following cost formula was developed by using monthly data for a hospital.
Total cost = $51,400 + ($125 x Number of patient days)
a. Is the dependent variable.
b. Is the variable rate.
c. Is the intercept.
d. Is the independent variable.
e. cannot be determined from the above formula.
6. In the cost formula, the term ‘‘Number of patient days’’
The following cost formula was developed by using monthly data for a hospital.
Total cost = $51,400 + ($125 x Number of patient days)
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the formula on the previous page.
7. In the cost formula, the term ‘‘Total cost’’
The following cost formula was developed by using monthly data for a hospital.
Total cost = $51,400 + ($125 x Number of patient days)
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the formula on the shown below.