Cost Accounting True/False Worksheet

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A variable cost increases in total as the level of activity increases.

• true

• false

A scattergraph is useful in recognizing unusual patterns in the cost data.

• true

• false

Contribution margin is defined as sales revenue less variable costs.

• true

• false

The contribution margin income statement is appropriate for external users.

• true

• false

Cost-volume-profit analysis assumes that all costs can be accurately described as either fixed or variable.

• true

• false

Target units equals fixed costs plus target profit divided by the unit contribution margin.

• true

• false

The degree of operating leverage is calculated by dividing sales revenue by net income.

• true

• false

A firm with a higher degree of operating leverage would be considered less risky than a comparable firm with a lower degree of operating leverage.

• true

• false

A quantity standard is the amount of input that should go into a single unit of the product or service.

• true

• false

A price standard is the price that should be paid per output unit for the input.

• true

• false