Direct materials cost that varies with the number of units produced is an example of a fixed cost of production


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False:fixed costs are costs that remain the same in total dollar amount as the activity base changes
The range of activity over which changes in cost are of interest to management is called the relevant range.
The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.
The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed costs for units produced and sold._______Depreciation on sewing machings based on sweatshirts produced per year.________ Workers production bonus for meeting budgeted units plus $.001 per unit for units over budget.______ Property tazes on factory, building and equipment.______Cotton and polyester cloth_____Maintenace costs for $2,000 per year plus $.001 per hour of use of sewing machines.1. Variable2. Mixed Cost3. Fixed
The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed costs for units produced and sold.___Color dyes for producing different colors of sweatshirts.___Straight-line depreciation on sewing machines___ Advertising costs of $10,000 per month.___ Salary of the production supervisor.___ Sales Salaries1. Fixed2. Variable3. Mixed Cost
The following is a list of various costs of producing sweatshirts. Classify each cost as either a variable, fixed, or mixed costs for units produced and sold.____ Lubricants used to oil machinery.___ Janitorial costs of $2,000 per month___ Electricity costs of $0.025 per kilowatt-hour___ Warehouse rent of $6,000 per month plus $.50 per square foot of storage used.___ Thread1. Variable2. Fixed3. Mixed Cost
Cost behavior refers to the manner in which: a cost is allocated to products a cost is used in setting selling prices a cost changes as the related activity changes a cost is estimated
Most operating decisions of management focus on a narrow range of activity called the: strategic level of production tactical operating level of production optimal level of production relevant range of production
Which of the following is NOT an example of a cost that varies in total as the number of units produced changes? Wages of assembly worker Direct materials cost Straight-line depreciation on factory equipment Electricity per KWH to operate factory equipment
As production increases, what should happen to the fixed costs per unit? Stay the same. Increase. Decrease. Either increase or decrease, depending on the variable costs.
Contribution margin is: A. the excess of sales revenue over variable cost B. another term for volume in the "cost-volume-profit" analysis C. profit D. the same as sales revenue
Which of the following conditions would cause the break-even point to decrease? A. Total fixed costs increase B. Unit selling price decreases C. Unit variable cost decreases D. Unit variable cost increases
The relative distribution of sales among the various products sold by a business is termed the: A. business"s basket of goods B. contribution margin mix C. sales mix D. product portfolio
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Horngren"s Financial & Managerial Accounting6th EditionBrenda L Mattison, Ella Mae Matsumura, Tracie Miller-Nobles
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