EntI_Watch Your Head

Which of the following is another name for operating costs:

• Overhead

• Capital expenditures

• Variable expenses

• Fixed expenses

Which of the following is a true statement regarding operating costs:

 

• They are fixed expenses.

   

• Only some businesses have them.

• They are not directly related to production.

• They occur once or twice a year.

Operating costs are the opposite of

• fixed expenses.

•  

  variable expenses.

• capital expenditures.

• utilities.

Operating costs that do not increase or decrease with changes in production are called __________ expenses.

Correct Answer

 

fixed

 

variable

 

semi-variable

 

mixed

•  

  mixed

• semi-variable

• variable

• fixed

A business’s rent or mortgage is a __________ expense.

• fixed

• semi-fixed

• variable

• variable

Operating costs that fluctuate with changes in production are called __________ expenses.

 

• variable

• fixed

• capital

• total

Sales commissions are a __________ expense.

 

• capital

• one-time

• variable

•  

  fixed

Operating costs that are fixed until the business reaches a certain level of production and then become variable are known as __________ expenses.

• unfixed

• semi-variable

• fluctuating

• capital

Considered together, salaries and sales commissions are a

• direct production cost.

• semi-fixed expense.

• type of payroll tax.

• capital expenditure.

Which of the following is a true statement regarding operating costs:

• They are usually divided into selling expenses and manufacturing expenses

• Purchasing a piece of equipment is an operating cost.

• Some may be considered either fixed or variable.

• Businesses spend more on operating costs than production costs.