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A cost which remains constant per unit at various levels of activity is a

• variable cost.
• fixed cost.
• mixed cost.
• manufacturing cost.

A fixed cost is a cost which

• varies in total with changes in the level of activity
• remains constant per unit with changes in the level of activity.
• varies inversely in total with changes in the level of activity.
• remains constant in total with changes in the level of activity.

Fixed costs normally will not include

• property taxes.
• direct labor.
• supervisory salaries.
• depreciation on buildings and equipment.

Cost behavior analysis is a study of how a firm's costs

• relate to competitors' costs.
• relate to general price level changes.
• respond to changes in the level of business activity.
• respond to changes in the gross national product.

The relevant range of activity refers to the

• geographical areas where the company plans to operate.
• activity level where all costs are curvilinear.
• levels of activity over which the company expects to operate.
• level of activity where all costs are constant.

Which one of the following is not an assumption of CVP analysis?

• All units produced are sold.
• All costs are variable costs.
• Sales mix remains constant.
• The behavior of costs and revenues are linear within the relevant range.

Contribution margin

• is always the same as gross profit margin.
• excludes variable selling costs from its calculation.
• is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.
• equals sales revenue minus variable costs.

If a company had a contribution margin of $750,000 and a contribution margin ratio of 40%, total variable costs must have been

• $1,125,000.
• $450,000.
• $1,875,000.
• $300,000.

At the break-even point of 2,000 units, variable costs are $110,000, and fixed costs are $64,000. How much is the selling price per unit?

• $87
• $23
• $32
• Not enough information

Cunningham, Inc. sells MP3 players for $60 each. Variable costs are $40 per unit, and fixed costs total $90,000. How many MP3 players must Cunningham sell to earn net income of $210,000?

• 15,000.
• 5,250.
• 3,750.
• 4,500.