Understanding Cost Types in Business

What type of cost remains constant in total regardless of changes in the level of activity or output?

• Variable cost

• Mixed cost

• Fixed cost

• Marginal cost

Which of the following best defines a variable cost?

• A cost that remains the same regardless of production levels

• A cost that changes in total in direct proportion to changes in the level of activity

• A cost that contains both a fixed and a variable component

• A cost that is incurred only once during the production process

Which of the following is an example of a fixed cost for a manufacturing company?

• Raw materials used in production

• Direct labor wages paid per unit produced

• Monthly factory rent

• Electricity cost per machine hour

Which of the following is a typical example of a variable cost?

• Depreciation on equipment using the straight-line method

• Insurance premiums paid annually

• Direct materials cost per unit produced

• Executive salaries

• The variable cost per unit

• The total cost

• The fixed cost component

• The number of units produced

• The fixed cost component

• The total mixed cost

• The variable cost component

• The break-even point

Tags

CCSS.HSF.LE.B.5

Which of the following statements about fixed costs per unit is correct?

• Fixed cost per unit remains constant as production increases

• Fixed cost per unit decreases as production increases

• Fixed cost per unit increases as production increases

• Fixed cost per unit is always zero

Tags

CCSS.HSF-LE.A.1B

Which of the following costs is most likely to be classified as a mixed cost?

• Direct materials

• Straight-line depreciation

• A utility bill that includes a fixed monthly charge plus a charge per kilowatt-hour used

• Direct labor paid per unit

Variable cost per unit is best described as:

• Increasing as output increases

• Decreasing as output increases

• Constant regardless of the level of output

• Always greater than fixed cost per unit

Tags

CCSS.HSF-LE.A.1B

A company pays a monthly telephone bill that consists of a flat fee of 50 plus 0.10 per call made. If the company makes 300 calls in a month, what is the total telephone cost for that month?

Tags

CCSS.HSF-LE.A.1B