Fixed Vs. Variable Costs

A cost that remains unchanged - in total despite changes in voume of activity (within a relevant range) is a:

• Fixed Cost.

  
  

• Variable Cost.

  
  

• Mixed Cost.

  
  

• Total Cost.

  
  

A cost that changes in proportion to changes in volume of activity is a(n):

• Fixed Cost.

  
  

• Variable Cost.

  
  

• Product Cost.

  
  

• Total cost

  
  

Mixed cost includes both fixed & variable cost components

• True

• False

Which of the following costs are most likely classified as variable?

• Factory rent

  
  

• Manager salaries

  
  

• Straight Line depreciation

  
  

• Direct Materials

  
  

Which of the following costs are most likely to be classified as fixed?

• Shipping Costs

  
  

• Sales Commissions

  
  

• Direct Labor

  
  

• Janitors working at corporate headquarters.

  
  

A company's normal operating range (excluding extremely high or low operating level not likely to ccur) is called

• Margin of Safety.

  
  

• High-low Point

  
  

• Break-even

  
  

• Relevant Range

  
  

A method that estimates cost behavior by using just the highest and lowest volume levels is called the

• Scatter method.

  
  

• High-low method.

  
  

• Step-wise method.

  
  

• Regression

Identify the following cost: Wages of an essembly-line worker paid on the basis of acceptable units produced

• Fixed

• Variable

• Mixed

Variable costs per unit increase proportionately with increases in volume of activity

• True

• False

The total amount of fixed cost changes with level of production, fixed cost per unit remains constant as volume changes

• True

• False