Ignores residual value in determining the amount to which a constant rate is applied, is used when calculating deprecation by Select one a Straight line method b Productivity method c. Units of activity method O d. Double declining method
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- Compute the Revenue Effect- Growth Component, indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours. Compute the Cost Effect- Price Recovery Component indicate if favorable/(unfavorable). *The activity driver for conversion cost is the direct labor hours.Cost-Capacity calculation technique takes into account a constant exponent to relate different costs to their respective capacities. a. False b. True The potential percent gain or loss in changes of variable is taken into account by: a. break-even analysis b. sensitivity analysis c. present worth analysis d. cost-benefit analysisThe high-low method: a. Calculates variable costs per unit by dividing the difference in the high and low activity levels by the high and low costs b. Assumes that the fixed portion of the mixed cost is the lowest monthly cost incurred during the period under consideration c. Allows differentiation between fixed and variable costs when dealing with mixed costs d. Combines the fixed and variable portions of a cost to determine the total cost
- 1.) Explain the effects of an increase in the volume of activity on the following costs. (Assume volume remains within the relevant range .) a. Total variable costs. b. Variable cost per unit. Total fixed cpst . d. Fixed cost per unit. e. Total semi variable costs. f. Semi variable cost per unit .Describe how total variable costs and unit variable costs behave with changes in the level of activity. Describe the behavior of (a) total fixed costs and (b) unit fixed costs as the level of activity increases. In applying the high-low method of cost estimation, how is the total fixed cost estimated? An examination of the accounting records of Larredo Company disclosed a high contribution margin ratio and production at a level below maximum capacity. Based on this information, suggest a likely means of improving operating income. If the unit cost of direct materials is decreased, what effect will this change have on the break-even point? What does operating leverage measure, and how is it computed?Fixed costs per unit increase proportionately with increases in volume of activity within the relevant range true false
- (a) Variable Costs are costs that change in direct proportion to changes in activity level. (b) Unit variable cost remain constant regardless of the level of activity a. Both statements are true b. Both statements are false c. Statement A is true and statement B is false d. Statement A is false and statement B is trueVariable costs are costs that: A.vary inversely proportional with changes in activity B.Remain constant as activity changes C.Decrease on a per unit basis as activity increases D.Remain constant on a per unit basis as activity changesVariable costs are costs that: a) Vary inversely proportional with changes in activity b) Remain constant as activity changes c) Decrease on a per unit basis as activity increases d) Remain constant on a per unit basis as activity changes
- Variable costs are expenses that ________. a.remain constant on a per-unit basis but change in total based on activity level b.remain constant on a per-unit basis and remain constant in total regardless of activity level c.remain constant in total regardless of activity level within a relevant range d.decrease on a per-unit basis as activity level increasesVariable costs are costs that: Select one: a. Neither of the above b. vary in total directly and proportionately with changes in the activity level c. Both (a) and (b) above. d. remain the same per unit at every activity levelWhich of the following statements is true regarding average fixed costs? Select one: a. Average fixed costs per unit fall as the level of activity rises. b. Average fixed costs per unit cannot be determined. c. Average fixed costs per unit remain fixed regardless of level of activity. d. Average fixed costs per unit rise as the level of activity rises.