QUESTION 27

On a per unit basis, variable costs remain constant with changes in volume.

True

False

QUESTION 28

Please match the following terms with their definitions.

- A. B. C. D. E. F. G. H. I. J. K.	The operating level needed to satisfy expected sales demand.
- A. B. C. D. E. F. G. H. I. J. K.	The maximum productive output possible over a given period.
- A. B. C. D. E. F. G. H. I. J. K.	The point at which total revenues equal total costs.
- A. B. C. D. E. F. G. H. I. J. K.	The way costs respond to changes in volume or activity.
- A. B. C. D. E. F. G. H. I. J. K.	Sales minus total variable costs.
- A. B. C. D. E. F. G. H. I. J. K.	A method of determining profit at different levels of volume.
- A. B. C. D. E. F. G. H. I. J. K.	Costs that vary in direct proportion to volume.
- A. B. C. D. E. F. G. H. I. J. K.	Costs that remain constant within a relevant range of volume or activity.
- A. B. C. D. E. F. G. H. I. J. K.	Ideal capacity reduced by normal work stoppages.
- A. B. C. D. E. F. G. H. I. J. K.	Costs with both fixed and variable components.
- A. B. C. D. E. F. G. H. I. J. K.	The span of activity in which actual operations are likely to occur.

A.	Cost behavior
B.	Variable costs
C.	Fixed costs
D.	Relevant range
E.	Mixed costs
F.	Theoretical (ideal) capacity
G.	Practical capacity
H.	Normal capacity
I.	Cost-volume-profit (C-V-P) analysis
J.	Breakeven point
K.	Contribution margin

QUESTION 29

Which of the following will always be a relevant cost?

	A.	Sunk cost
	B.	Fixed cost
	C.	Variable cost
	D.	Opportunity cost

QUESTION 30

Product AB has a suggested selling price of $27 per unit and a projected variable cost per unit of $15. Fixed costs are expected to increase by $197,040 per month. How many units must be sold each month to earn a profit of $6,000 per month?

	A.	12,450.
	B.	16,740.
	C.	16,920.
	D.	12,090.

QUESTION 31

When volume equals zero units,

	A.	fixed cost equals $0.
	B.	variable cost equals $0.
	C.	total cost equals $0.
	D.	net income equals $0.

QUESTION 32

When fixed costs are $45,000, the variable cost is $5 per unit, and the product sells for $20 per unit, the breakeven point is a.

	A.	9,000 units.
	B.	2,250 units.
	C.	1,800 units.
	D.	3,000 units.