1. Write TRUE if the statement is correct and FALSE if the statement is wrong. A. Total fixed costs do not change in response to changes in the volume of pro duction...... B. In a manufacturing company, fixed costs remain the same at many different production levels within the relevant range......... C. Unit variable costs do not change as total production increases...... D. Mixed costs are purely fixed........ E. Fixed costs per unit decrease as production levels increase....... F. The fixed cost per unit does not always remain the same.......... G. Total variable costs change in direct proportion to changes in volume... H. Total mixed costs increase as volume increases because of the variable cost component..... I. Relevant range is the range of activity (volume) over which total fixed costs and variable costs per unit can be assumed to remain the same... J. At any given volume, average fixed costs must equal average variable costs... K. When using the high-low method, fixed costs and variable costs appear in the same cost equation............ L. When using the high-low method, the "low" point should be chosen as the data point with the lowest volume (not the lowest cost). M. A contribution margin income statement allows managers to see which costs will change with changes in volume and which costs will remain fixed......... N. The cost of goods sold is a variable cost for manufacturers, but contains a mix ture of variable and fixed production costs for Merchandise Company 0. The contribution margin per unit is how much profit each unit contributes after fixed costs are considered............ P. The break-even point is the sales level where operating income is positive. Q. The break-even point represents the minimum number of units a company must sell before it earns a profit............ R. The margin of safety is the excess of expected sales over break even sales. S. The margin of safety can be expressed in units, in sales dollars, or as a per centage......... 1. A(n) cost is a cost whose total amount changes in direct proportion to a change in volume. A. variable B. fixed C. mixed D. irrelevant 2. Which of the following costs is an example of a fixed cost? A. Sales commissions B. Salary of plant manager C. Direct materials D. Delivery costs 3. Variable costs are described by which of the following statements? A. They vary per unit of output. B. They are fixed in total. c. They are fixed per unit and vary in total. D. They decrease per unit as production volume increases 4. Total fixed costs for Randolph Manufacturing are 8754,000. Total costs, including both fixed and variable, are 85,000,000 if 160,000 units are produced. The variable cost per unit is: A. $31.25/unit B. 81.71/unit C. $35.96.25/unit D. $26.54/unit 5. If production increases by 25%, how will total fixed costs likely react? A. Increase by 12.5% B. Increase by 25% C Decrease by 25% D. Remain the same 6. If production increases by 30%, how will total variable costs likely react? A. Increase by 15% B. Decrease by 30% C. Increase by 30% D. Remain the same 7. Managers should consider which of the following when predicting costs at different volumes? A. The relevant range of the cost B. The type of cost behaviour Management Accounting Tutorial - Page 3 of 6 0/0/0 C. Both of the above should be considered. D. Neither of the above should be considered. 8. To find the number of units that need to be sold to breakeven, the formula used could be A fixed expenses contribution margin per unit. B. contribution margin per unit : fixed expenses. C. fixed expenses contribution margin ratio. D. contribution margin ratio fixed expenses. 9. On a CVP graph, the total cost line intersects the total revenue line at which of the following points? A. The breakeven point B. The level of the variable costs C. The level of the fixed costs D. None of the above