2nd Partial Quiz - A

Which type of costs cannot be attributed specifically to a particular product?

• Variable costs

• Salaries

• Cost per unit

• Indirect costs

Costs that can be clearly attributed to an activity in the production process are called ________ costs.

Read the following sentences and select the TRUE ones :

• Fixed costs are totally independent of the output level

• The various sources of income for a business are called revenue streams

• Merchandise income, membership fees and royalties are examples of revenue streams

• Fixed costs are production costs that do not change, e.g. salaries and rents

• Variable costs change directly with the level of production or sales

This is the amount customers need to pay per unit in order for the firm to break-even or to reach a particular target profit

• Target price

• Target profit

• Profit Output

Break-even quantity is the quantity of sales (sales volume) required for a firm to reach break-even. It is found by using the formula: BEQ = Fixed costs / (Price per unit – variable cost per unit).

• True

• False

The charges that an organization incurs from its operations, e.g. rent, wages, salaries, and insurance.

Which term refers to charges that an organization incurs from its operations and business activities?

• Profit

• Revenues

• Loss

• Costs

Which type of costs can be clearly identified with the production of a specific good or service?

• Variable costs

• Direct costs

• Indirect costs

• Semi-variable costs

Which of the following are variable costs of production

• Raw materials

• Salaries of employees

• Packaging

• Wages of employees

Costs that change with the level of output - they rise when output or sales increase, e.g. raw materials and packaging costs.