Cost Measurement - General

Question 1

if the level of activity increases within the relevant range what happens to Fixed costs, variable costs and total costs?

Answer 1

1) total cost will increase
2) fixed unit cost per unit will decrease.
3) Variable cost will remain same per unit

Question 2

Fixed unit costs formula

Answer 2

Total Fixed Costs / Relevant Range Volume

Question 3

total fixed cost

Answer 3

does not vary with the level of volume along the relevant range

Question 4

Activity Base should have a causal relationship to the incurrence of the overhead costs. What are the activity bases?

Answer 4

Labor hours
labor costs
and machine hours

Question 5

What are Companies are required to use under GAAP?

Answer 5

full absorption costing

Question 6

Full absorption costing

Answer 6

includes all product costs initially in inventory until products are sold.

Question 7

When inventory increases variable costing income

Answer 7

is less than absorption costing income

Question 8

What is found on a cost of goods manufactured statement

Answer 8

Supplies
Indirect Labor
Depreciation

Question 9

Materials available for use is found on the

Answer 9

Cost of goods manufactured statement under Direct Materials

Question 10

Difference between fixed costs and variable costs

Answer 10

fixed cost does not vary with the level of activity

while a variable cost does vary proportionally in total with the level of activity