Operating Costs Quiz

Which of the following is another name for operating costs?

• Overhead

• Capital expenditures

• Fixed expenses

• Variable expenses

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

• They are fixed expenses.

• They are not directly related to production.

• They occur once or twice a year.

• Only some businesses have them.

Operating costs are the opposite of

• utilities.

• variable expenses.

• fixed expenses.

• capital expenditures.

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

• fixed
• mixed

• semi-variable

• variable

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

• fixed
• variable

• semi-variable

• mixed

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

• variable
• semi-variable

• fixed

• mixed

Sales commissions are a ________ expense.

• variable
• one-time

• capital

• fixed

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

• fluctuating

• unfixed

• semi-variable

• capital

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

• Purchasing a piece of equipment is an operating cost.

• They are usually divided into selling expenses and manufacturing expenses.

• Some may be considered either fixed or variable.

• Businesses spend more on operating costs than production costs.

Which of the following operating costs is most likely to be considered fixed by one business and variable by another business:

• Employee benefits

• Depreciation

• Travel expenses

• Pest control