Book Title; Author

Chapter 15 - True/false quiz


1.
A variable cost remains constant per unit at various levels of activity.
A. True
B. False


2.
A fixed cost remains constant in total and on a per unit basis at various levels of activity.
A. True
B. False


3.
The relevant range of activity is the activity level where the firm will earn profit.
A. True
B. False


4.
A mixed cost has both selling and administrative cost elements
A. True
B. False


5.
The difference between the costs at the high and low levels of activity represents the fixed cost element of a mixed cost.
A. True
B. False


6.
Contribution margin is the amount of revenues remaining after deducting cost of goods sold.
A. True
B. False


7.
If the unit contribution margin is $1 and unit sales are 5,000 units above the break-even volume, then net profit will be $5,000.
A. True
B. False


8.
The margin of safety is the difference between contribution margin and fixed costs.
A. True
B. False


9.
A CVP income statement classifies total costs by functional areas.
A. True
B. False


10.
Variable costing is not acceptable in reporting to shareholders under generally accepted accounting principles.
A. True
B. False


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