# Acct Chapter 15

1995 Words May 27th, 2013 8 Pages
Chapter 15 - Multiple Choice Questions

1. A variable cost is a cost that a. varies per unit at every level of activity b. occurs at various times during the year c. varies in total in proportion to changes in the level of activity d. may not be incurred, depending on management 's discretion

C is correct.
Section “Cost behaviour analysis” – A variable cost varies in total in proportion to changes in the level of activity.

2. A cost which remains constant per unit at various levels of activity is a a. variable cost b. fixed cost c. mixed cost d. manufacturing cost

A is correct.
Section “Cost
are common b. are the exception rather than the rule c. have no fixed costs d. have no variable costs

B is correct.
Section “Cost behaviour analysis” – Firms operating constantly at 100% are the exception rather than the rule.

16. Which one of the following is a name for the range over which a company expects to operate? a. Mixed range b. Fixed range c. Variable range d. Relevant range

D is correct.
Section “Cost behaviour analysis” – The range over which a company expects to operate is called the relevant range.

17 The graph of variable costs that behave in a curvilinear fashion will a. approximate a straight line within the relevant range b. be sharply kinked on both sides of the relevant range c. be downward sloping d. be a stair-step pattern

A is correct.
Section “Cost behaviour analysis” – The graph of variable costs that behave in a curvilinear fashion will approximate a straight line within the relevant range.

18. A mixed cost contains a. a variable cost element and a fixed cost element b. both selling and administrative costs c. both retailing and manufacturing costs d. both operating and non-operating costs

A is correct.
Section “Cost behaviour analysis” – A mixed cost contains a variable cost element and a fixed