MA1 - C3 - Q1

Which of the following can be substitute for “semi-variable cost”?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

What is represented at point K on the scattergraph below?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

Which cost the following graph BEST depicts?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

Which cost the following graph BEST depicts?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

Which cost the following graph BEST depicts?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

Refer to the diagram showing the relationship between total cost and level of activity. What type of cost is represented by the diagram?

• Mixed cost

• Step-cost

• Variable cost

• Fixed cost

A firm receives an invoice for using electricity. The invoice contains a service charge and charge per unit of electricity used. This is an example of what type of cost?

• Mixed cost

• Step-cost

• High-low cost

• Fixed cost

The best definition of a fixed cost is costs which

• remain constant in total when output volume changes

• remain constant when measured per unit of output

• will never increase

• vary substantially in total, from month to month, when production is constant

A semi-variable cost is one that, in the short-term, remains the same over a given range of activity but beyond that increases and then remains constant at the higher level of activity. Is this statement true or false?

• False

• True

Which of the following statements BEST describes the behaviour of a stepped fixed cost?

• Costs do not change with the level of activity until the activity level exceeds a certain point. They then increase, but then remain stable again until activity levels exceed another critical point.

• Costs do not change with the level of activity i.e. they vary with time rather than production.

• Costs consist of a fixed element plus an additional element that increases on a unit basis as the level of activity increases.

• Costs with no fixed element which vary as the level of activity varies.