This quiz works best with JavaScript enabled. Home > Accounting > Cost Accounting > Cost Behaviors > Cost Behaviors – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Behaviors Quiz 2 (28 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Variable costs are ..... A) Costs that remain the same in total regardless of changes in the activity level. B) Costs that contain both a variable costs and fixed cost element. C) Costs that vary in total directly and proportionately with changes in the activity level. D) None of above. Show Answer Correct Answer: C) Costs that vary in total directly and proportionately with changes in the activity level. 2. If a firm increases its activity level, A) Most costs will rise. B) No costs will remain the same. C) Costs should remain the same. D) Some costs will change, others will remain the same. Show Answer Correct Answer: D) Some costs will change, others will remain the same. 3. As volume decrease, total fixed cost ..... A) Are constant and cost per unit decreases. B) Are constant and cost per unit increase. C) Increase. D) Decrease. Show Answer Correct Answer: B) Are constant and cost per unit increase. 4. As volume decreases, total fixed costs A) Are constant and cost per unit decreases. B) Are constant and cost per unit increases. C) Increase. D) Decrease. Show Answer Correct Answer: B) Are constant and cost per unit increases. 5. FIND THE VARIABLE COST PER UNIT:at 4, 000 units total cost = £ 31, 000at 5, 500 units total cost = 340, 000 A) £ 26.66. B) £ 9, 000. C) £ 6.00 per unit. D) 1, 500 units. Show Answer Correct Answer: C) £ 6.00 per unit. 6. Below is the method used to segregate mixed cost, except ..... A) Simple regression. B) High-low activity. C) Cost volume profit analysis. D) Graph. Show Answer Correct Answer: C) Cost volume profit analysis. 7. THE PRODUCTION LEVEL IS 35000 unitsdirect raw material= RM 109000direct labour =RM 83000indirect wages = RM 3000factory's electric = RM 9000determine the cost function A) Y = RM 3000 + RM 5.47x. B) Y = RM 3000 + RM 5.74 x. C) Y = RM 12000 + RM 5.48 x. D) None of above. Show Answer Correct Answer: B) Y = RM 3000 + RM 5.74 x. 8. Examples related to the fixed cost A) Supervisor salary. B) Rental of truck. C) Wages for production line. D) None of above. Show Answer Correct Answer: C) Wages for production line. 9. The direct cost is classified as a (n) A) Fixed cost. B) Variable cost. C) Mixed cost. D) Manufacturing overhead cost. Show Answer Correct Answer: B) Variable cost. 10. Fixed costs per unit A) Changes over time. B) Always fixed. C) Always variable. D) Mixed of variable and fixed costs. Show Answer Correct Answer: C) Always variable. 11. The following is assumptions in Cost Volume Profit (CVP) analysis EXCEPT A) Fixed cost and variable cost can be identified. B) Units of sales equals to unit of production. C) Costs and revenues are linear. D) Selling price per unit always changed. Show Answer Correct Answer: D) Selling price per unit always changed. 12. Total cost($ ):250k, 312k, 400kActivity level(unit):5k, 7.5k, 10kUsing the high-low method, what is the variable cost per unit? A) $ 100. B) $ 25. C) $ 32. D) $ 30. Show Answer Correct Answer: D) $ 30. 13. Identify mixed cost A) Employee paid basic wage plus commission based on production quantity. B) Rent of the factory workshop. C) Print ink used for letterhead and logos. D) None of above. Show Answer Correct Answer: A) Employee paid basic wage plus commission based on production quantity. 14. When a cost changes in total in direct proportion to changes in volume/unit, it is A) A variable cost. B) A fixed cost. C) A semi-variable cost. D) A mixed cost. Show Answer Correct Answer: A) A variable cost. 15. In the linear equation y=a+bx, what is the variable cost per unit? A) Y. B) X. C) A. D) B. Show Answer Correct Answer: C) A. 16. Teak Furniture Corporation incurred the following costs. Wood used in the production of furniture ..... A) Mixed cost. B) Fixed cost. C) Fixed asset. D) Variable cost. Show Answer Correct Answer: D) Variable cost. 17. Fixed costs are conventionally deemed to be which of the following? A) Constant in total when production volume changes. B) Constant per unit of output. C) Outside the control of management. D) Easily controlled. Show Answer Correct Answer: A) Constant in total when production volume changes. 18. As volume/unit decreases, total fixed costs A) Are constant and cost per unit decreases. B) Are constant and cost per unit increases. C) Increase. D) Decrease. Show Answer Correct Answer: B) Are constant and cost per unit increases. 19. ..... is constant regardless of activity level, variable costs change proportionately with output and mixed costs are a combination of both. A) A variable cost. B) A mix cost. C) A fixed cost. D) A stepped fixed cost. Show Answer Correct Answer: C) A fixed cost. 20. Cost-volume-profit analysis assumes that over the relevant range, total A) Variable costs are nonlinear. B) Revenues are linear. C) Fixed costs are nonlinear. D) Costs are unchanged. Show Answer Correct Answer: B) Revenues are linear. 21. When there is no production, the total manufacturing cost is equal to ..... A) Fixed cost. B) Variable cost. C) Direct cost. D) Manufacturing cost. Show Answer Correct Answer: A) Fixed cost. 22. Contribution Margin: A) Is revenue remaining after deducting variable costs. B) May be expressed as contribution margin per unit. C) Is selling price less cost of goods sold. D) Both (a) and (b) above. Show Answer Correct Answer: D) Both (a) and (b) above. 23. Cost behavior analysis is a study of how a firm's costs A) Respond to changes in the gross national product. B) Relate to general price level changes. C) Respond to changes in the level of business activity. D) Relate to competitors' cost. Show Answer Correct Answer: C) Respond to changes in the level of business activity. 24. When level of activity on cost unit increase, variable cost per unit ..... A) Also increase. B) Remain constant. C) Decrease. D) None of above. Show Answer Correct Answer: B) Remain constant. 25. Are costs that vary in total directly and proportionately with changes in the activity level. A) Irrelevant Cost. B) Mixed Cost. C) Fixed Cost. D) Variable Cost. Show Answer Correct Answer: D) Variable Cost. 26. Mixed costs consist of: A) Variable cost element and a fixed cost element. B) Fixed cost element and a controllable cost element. C) Relevant cost element and a controllable cost element. D) Variable cost element and a relevant cost element. Show Answer Correct Answer: A) Variable cost element and a fixed cost element. 27. Fixed cost, variable cost and mixed cost are which classification of cost? A) Cost function. B) Production process. C) Cost behaviour. D) Nature of expense. Show Answer Correct Answer: C) Cost behaviour. 28. As volume changes, which of these costs could be considered a mixed cost? A) Salaries of the accountant. B) Utilities at the manufacturing plant. C) Sales commission expense. D) Assembly line labor. Show Answer Correct Answer: B) Utilities at the manufacturing plant. ← PreviousRelated QuizzesCost Accounting QuizzesAccounting QuizzesCost Behaviors Quiz 1 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books