Premium Essay

Cost

In: Business and Management

Submitted By hoafiona
Words 750
Pages 3
Question 1.
Costs may be broadly classified as: Selling and administrative Product and marginal Fixed and variable Fixed and indirect
Question 2.
For a hot bread shop, which of the following costs would most likely be classified as variable rather than fixed? Flour Advertising Equipment lease payments Rent of premises
Question 3.
Which statement is correct in relation to fixed costs per unit of output? They stay the same irrespective of the level of activity They increase as the level of activity increases They decline as the level of activity declines None of the above
Question 4.
A total cost line is non-linear and of a convex nature, when it is: A fixed cost A linear variable cost Expenses involving economy of scale benefits Expenses where a high level of demand caused supply shortages
Question 5.
Which of the following would not normally represent an example of a semi-variable (semi-fixed) cost? Spare parts-vehicle service centre Electricity-hairdresser Telephone-butcher Depreciation of equipment
Question 6.
What does the point where the total cost line cuts the revenue line represent? Break-even point Relevant range The margin of safety Total fixed cost
Question 7.
What statistical technique can be used to determine the fixed and variable components of different cost types? Probability analysis Regression analysis Correlation Factor analysis
Question 8.
The break-even unit formula is represented by which of the following equations? Total revenue-all costs (Fixed costs + desired profit)/ contribution margin Fixed costs/([unit selling price-unit variable cost]/[unit selling price]) Fixed costs/(sales revenue per unit-variable costs per unit)
Question 9.
Compute breakeven sales units if fixed costs are $12,000; the unit

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