FIA CVP

Variable costs are costs that remain the same per unit at every level of activity.

• True

• False

If volume increases, all costs will increase

• True

• False

Two costs at Jaya Go Enterprise. appear below for specific months of operation.

                                 Month            Amount          Units Produced

Delivery costs   January        RM40,000              40,000

                             February       RM55,000               60,000

Utilities               January         RM84,000               40,000

                              February      RM126,000              60,000

Which type of costs are these?

• Delivery costs and utilities are both variable.

• Delivery costs and utilities are both mixed.

• Utilities are mixed and delivery costs are variable.

• Delivery costs are mixed and utilities are variable.

If a sales person incurs RM2,000 of expenses in servicing two customers and RM4,000 of expenses in servicing four customers, the fixed costs are RM1,000

• True

• False

A mixed cost contains both selling and administrative cost elements.

• True

• False

If revenue is RM80 and variable cost is RM40% of revenue, then contribution margin = RM48

• True

• False

The contribution margin is the amount of revenue remaining after deducting fixed costs.

• True

• False

Mixed costs may be separated into fixed costs and variable costs by using

• the variable costing method

• the high-low method

• the contribution margin method

• the traditional method

Which of the following is not a fixed cost?

• Direct materials

• Depreciation

• Lease charge

• Property taxes

The increased use of automation and less use of the work force in companies has caused a trend towards an increase in

• both variable and fixed costs.

• fixed costs and a decrease in variable costs.

• variable costs and a decrease in fixed costs.

• variable costs and no change in fixed costs.