5

Question 1

The cost of ice cream at the ice cream shop would be classified as

Answer 1

Variable cost

Question 2

Accompanies electric bill would be classified as a
FMV

Answer 2

Mix cost

Question 3

The property insurance bill for a business would be most likely

Answer 3

Fix cost 

Question 4

Variable costs increase and direct relation to increases in activity

Answer 4

True

Question 5

Which of the following methods is not a means for separating mix cost in two variable and fix components

Answer 5

Variable costing

Question 6

Signing a quarterback to a five-year contract for 50 million is example of discretionary cost

Answer 6

False

Question 7

Both fixed and mix cost decrease with decreases in production

Answer 7

False

Question 8

The span of activity within which costs will behave as expected is called

Answer 8

Relevant range

Question 9

The margin of safety percentage is the margin of safety in dollars divided by the break even sales in dollars

Answer 9

False

Question 10

Break even point is the point at which profit equals zero

Answer 10

True

Question 11

A static budget is at one level of activity

Answer 11

True

Question 12

Both variable and absorption costing are acceptable under the GAAP

Answer 12

False

Question 13

And periods of rising inventories variable costing will always yield lower operating income

Answer 13

True

Question 14

The primary difference between variable costing and absorption costing is

Answer 14

And absorption costing fixed manufacturing overhead is a product cost

Question 15

Winters Inc. is preparing financial statements to be distributed to investors and creditors the company should prepare the income statement using

Answer 15

Absorption costing because it follows GAAP