Chapter 6

Which one is NOT a cost behavior?

• Fixed Costs

• Variable Costs

• Manufacturing Overhead Costs

• Mixed Costs

Which statement is correct?

• The line on a graph representing total fixed costs will be a horizontal line.

• When graphing total fixed costs, the fixed cost per unit is the slope of the fixed cost line.

• When graphing total fixed costs, the cost line always begins at the origin

A(n) ________ cost is a cost whose total amount changes in direct proportion to a change in volume

• Variable

• fixed

• mixed

With respect to total fixed costs, which of the following statements is true?

• They will decrease as production increases within the relevant range.

• They will increase as production decreases within the relevant range.

• They will remain the same as production levels change within the relevant range

• They will decrease as production decreases within the relevant range.

Using account analysis, what type of cost is the local phone service which charges a flat fee for unlimited local calls?

• Step cost

• Variable cost

• Fixed cost

• Mixed cost

When using the high-low method, the slope of the mixed cost line is fixed cost per unit

• True

• False

When using the high-low method, the "high" point should be chosen as the data point with the highest cost (not the highest volume).

• True

• False

The high-low method basically fits a line through the highest and lowest ________ points.

• fixed cost

• variable cost

• volume

• none of the above

The tennis club where you play tennis charges $50.00 per month and $10.00 per hour of court time. If your current month's bill is $100.00, how many hours of court time did you use?

• 5 hours

• 10 hours

• 8 hours

• 2 hours

The cost equation determined by regression analysis is usually more accurate than the line determined by the high-low method

• True

• False