Which of the following statements is NOT true about costs per unit within the relevant range? Question 7 options: Fixed costs decrease in proportion to increases in volume. Mixed costs decrease but not in direct proportion to increases in volume. Variable costs stay constant with changes in volume. Curvilinear costs stay constant with changes in volume.

Which of the following statements is NOT true about costs per unit within the relevant range? Question 7 options: Fixed costs decrease in proportion to increases in volume. Mixed costs decrease but not in direct proportion to increases in volume. Variable costs stay constant with changes in volume. Curvilinear costs stay constant with changes in volume.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter13: Capital Structure And Leverage

Section: Chapter Questions

Problem 2Q: Would each of the following increase, decrease, or have an indeterminant effect on a firms...

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When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unit
Which of the following statements is true regarding average fixed costs? A. Average fixed costs per unit remain fixed regardless of level of activity. B. Average fixed costs per unit rise as the level of activity rises. C. Average fixed costs per unit fall as the level of activity rises. D. Average fixed costs per unit cannot be determined.
When fixed costs decrease and all other variables remain unchanged, the break-even point will _______________. A. remain unchanged B. increase C. decrease D. produce a lower contribution margin
Would each of the following increase, decrease, or have an indeterminant effect on a firms break-even point (unit sales)? a. The sales price increases with no change in unit costs. b. An increase in fixed costs is accompanied by a decrease in variable costs. c. Variable labor costs decline; other things are held constant.
The use of fixed costs to extract higher percentage changes in profits as sales activity changes involves a. margin of safety. b. unit contribution margin. c. degree of operating leverage. d. sensitivity analysis. e. variable cost reduction.
If the sales mix in a multi-product environment shifts to a higher volume in low contribution margin products, the break-even point will ____________________________________ . A. remain unchanged because all products are included in the calculation of break-even B. increase because the low contribution margin products have little effect on break-even C. increase because the per composite unit contribution margin will decrease D. decrease because the per composite unit contribution margin will increase
Product costs under variable costing are typically: A. higher than under absorption costing B. lower than under absorption costing C. the same as with absorption costing D. higher than absorption costing when inventory increases
Discuss the two factors affecting both sales and variable costs to which a change in contribution margin can be attributed.
Variable costs are expenses that ____________________________ . remain constant on a per-unit basis but change in total based on activity level remain constant on a per-unit basis and remain constant in total regardless of activity level decrease on a per-unit basis as activity level increases remain constant in total regardless of activity level within a relevant range
The contribution margin is the a. amount by which sales exceed total fixed cost. b. difference between sales and total cost. c. difference between sales and operating income. d. difference between sales and total variable cost. e. difference between variable cost and fixed cost.
How do costs behave when there is a change in volume?a) ______ increases or decreases in total in direct proportion to increases or decreases in sales volume. b) ______ remains the same in total, regardless of change in sales. c) ______ have both a variable and fixed component. d) Answer the following regarding the high-low method:i) What is the formula for determining the variable costs when using the high low method:ii) Given the following information for the high and low levels, what is the variable cost per unit and the total fixed costs? iii) Based on the information in part ii), what is the relevant range?In MyAccountingLab, complete Try It! 21-1 and S21-1 through S21-3.LO2. What is contribution margin, and how is it used to compute operating income?a) What is the contribution margin if net sales revenue is $100,000 and variable costs are $40,000? b) Based on the information in part a), what is the contribution margin ratio?In MyAccountingLab, complete Try It! 21-2 and S21-4 and…
When the level of output increases within the relevant range, _____. a.fixed cost per unit does not change, but the variable cost per unit decreases b.both fixed cost per unit and variable cost per unit do not change c.both fixed cost per unit and variable cost per unit decrease d.fixed cost per unit decreases, but the variable cost per unit does not change

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	Fixed costs decrease in proportion to increases in volume.
	Mixed costs decrease but not in direct proportion to increases in volume.
	Variable costs stay constant with changes in volume.
	Curvilinear costs stay constant with changes in volume.