Chapter 5 Cost Behavior:

Total variable costs increase as the level of activity increases.

Group of answer choices

True

False

Flag question: Question 2Question 22.5 pts

Variable costs are costs that remain constant in total dollar amount as the level of activity changes.

Group of answer choices

True

False

Flag question: Question 3Question 32.5 pts

If a company is operating at a loss,

Group of answer choices

fixed costs are greater than sales

selling price is lower than variable cost per unit

selling price is less than total cost per unit

fixed cost per unit is greater than variable cost per unit

Flag question: Question 4Question 42.5 pts

Over the relevant range, total revenues and total costs

Group of answer choices

increase, but at a decreasing rate

decrease

remain constant

are graphed as straight lines

none of the above

Flag question: Question 5Question 52.5 pts

Which of the following classifies as a variable cost?

Group of answer choices

Straight-line depreciation on the production equipment

The salary of the production supervisor

Fabric for use in the quilts to be produced

Lease payments of $220.00 per month plus $.002 per copy

Flag question: Question 6Question 62.5 pts

Direct materials cost that varies with the number of units produced is an example of a mixed cost of production.

Group of answer choices

True

False

Flag question: Question 7Question 72.5 pts

If a company is earning a profit, its fixed costs

Group of answer choices

are less than total contribution margin

are equal to total contribution margin

are greater than total variable costs

can be greater than or less than total contribution margin

All of the above

Flag question: Question 8Question 82.5 pts

Ingram Co. manufactures office furniture during 2006. During its most productive month, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total total fixed costs during the year are:

Group of answer choices

$17,600

$28,400

$56,000

cannot be determined from the data given

Flag question: Question 9Question 92.5 pts

In the following graph, total variable costs are represented by

y A

| * D

| * *

| * *

| * *

| * *

| * *

| * *

| * *

| * *

B|*_________ __* __________________________________ C

| *

| *

| *

| *

|*______________________________________________

O E

Group of answer choices

the line BD

the line BC

the vertical distance between the lines OA and BD

the vertical distance between the lines BD and BC