MAS 2

What are the classifications of costs based on function?

• D. Product, Period, Differential

• B. Manufacturing, Selling, Administrative

• A. Variable, Fixed, Semi-Variable

• C. Direct, Indirect, Overhead

Which cost remains constant per unit but changes in direct relationship with quantity?

• D. Mixed Cost

• C. Variable Cost

• B. Semi-Variable Cost

• A. Fixed Cost

What is the relevant range assumption in cost behavior?

• C. Parabolic relationship also known as 'Curvilinear relationship'

• D. All of the above

• B. Linear relationship or straight-line relationship

• A. Band of activity within which the identified cost behavior patterns are valid

What is the point of activity level where total revenues equal total costs, resulting in neither profit nor loss?

• B. Margin of Safety

• A. Break-even Point

• D. Degree of Operating Leverage

• C. Cost Indifference Point

What will change as long as any of the factors needed to compute for total revenues or total cost will change?

• C. Volume or number of units

• B. Variable cost per unit

• A. Selling price per unit

• D. All of the above

What is the formula for calculating Break-even Point in units?

• B. Total Fixed Costs / Contribution Margin per Unit

• D. Total Sales Units - MOS Units

• A. Total Fixed Costs / Contribution Margin Ratio

• C. Selling Price per Unit - Variable Cost Per Unit

What does the degree of operating leverage (DOL) measure?

• B. The amount by which actual or planned sales may be reduced without incurring a loss

• A. Sensitivity of a company's operating income to its sales

• C. The difference between actual or planned sales volume and break-even sales

• D. The point at which total cost of two alternatives under consideration is the same

What is the concept that indicates the amount by which actual or planned sales may be reduced without incurring a loss?

• A. Margin of Safety

• B. Break-even Point

• C. Cost Indifference Point

• D. Step Fixed Cost

What is the benefit of scenario analysis?

• A. More proactive risk management by assessing the impact of potential situations

• D. All of the above

• C. A methodical approach to analyzing the future may help companies to find opportunities or risks they may have otherwise overlooked

• B. Better decision-making as a result of investigating the benefits and risks of various options

What is the example of step fixed costs?

• D. The cost of rolling out an entirely new sales region, which may include the cost of a warehouse distribution system

• B. The cost of starting up a new production shift, which includes utilities and the salaries of shift supervisors

• A. The compensation of a quality assurance (QA) worker in the assembly area of a production department

• C. The cost of a new production facility, which includes depreciation on the equipment and the salaries of the production line supervisors