cost

As the production level of a firm increases, which cost will fall continuously?

• Average fixed cost

• Average variable cost

• Cost per unit

• Total fixed cost

Overheads are best described as

• Costs from non-operating activities

• Costs that are fixed in short term

• Costs that must be paid to generate output

• Costs that vary with the level of output

What can be worked out from calculating the price of a product and its variable costs?

• Total contribution

• Unit contribution

• Break-even point

• Profit per unit

Which of the following statements applies to the margin of safety?

• The firm operates at a level lower than its break-even

• The firm does not make a profit or loss

• The firm operates at a level higher than its break-even

• The firm produces at the break-even level of output

The concept contribution cannot be used to make the decision of

• Make or buy

• Pricing

• Break-even

• Cash flow

Which of the following is not a criticism of using break-even

• In reality, costs are unlikely to be linear

• Multi-product firms cannot make use of break-even analysis

• Prices are unlikely to be constant

• Unit costs are unlikely to remain constant

Examples of variable costs for a motor vehicle manufacturer do not include

• Building insurance costs

• Costs of component parts

• Costs of purchasing materials

• Piece rate payment to workers