Section 2 Multiple Choice Please circle the correct answer 1. Expense Asfied cost expense B is a variable cost. During the current year, the activity level has increased but is the olevant ange. In terms of cost per unit of activity, you would expect which of the following statements to be true? A Expense A has remained unchanged. B. Expense B has decreased C. Expense A has decreased D. Expense B has increased 2. Which costs will change with a decrease in activity within the relevant range? A Totalfred costs and total variable costs. B. Unit feed cost and total variable costs C. Unit variable cost and united cost D. United cost and to fed costs 3. Within the relevant range of activity, how will variable cost per unit behave? A. It will increase in proportion with the level of activity. B. it will remain constant. C. It willorary Inversely with the level of activity D. is behaviour cannot be determined without additional information What will result from an increase in the activity level within the relevant range? A. An increase in foxed cost per unit. B. A proportionate increase in total fixed costs C. An unchanged fred cost per unit. D. A decrease in fied cost per unit. 5. What does the term relevant range" mean? A. The range within which costs may fluctuate B. The range within which a particular cost formula is valid C. The range within which production may vary. D. The range within which the relevant costs are incurred. 6. The linear equation Ya+bX is often used to express cost formulas. Which of the following representations in this equation is correc A. The term represents variable cost per unit of activity B. The a term represents variable cost in total C. The X term represents total costs. D. The term represents total fixed costs 7. Which of the following is an example of a discretionary fixed cost? A Insurance B. Taxes on real estate C. Management training D. Amortization of buildings and equipment 8. Which of the following is an example of a committed fixed cost? A. A training program for salespersons B. Executive travel expenses Page 2 of 8 C. Property taxes on the factory building D. New product