MANAGERIAL ACCOUNTING A is a fixed cost; B is a variable cost. During the curren

Question

MANAGERIAL ACCOUNTING A is a fixed cost; B is a variable cost. During the current year the level of activity has decreased but is still within the relevant range. We would expect that: A) The cost per unit of A has remained unchanged. B) The cost per unit of B has decreased. C) The cost per unit of A has decreased. D) The cost per unit of B has remained unchanged. Answer 2. Which costs will change with an increase in activity within the relevant range? A) Unit fixed cost and total fixed cost B) Unit variable cost and total variable cost C Unit fixed cost and total variable cost D) Unit fixed cost and unit variable cost Answer Salaries of accounts receivable clerks when one clerical worker is needed for every 750 accounts receivable is an example of a A) fixed cost B) step-variable cost C) mixed cost ) curvilinear cost Answer 4. Limousine Conversion Company purchases ordinary Cadillacs, cuts them in half, and then adds a middle section to the vehicles to create stretch limousines. With respect to the number of cars converted, the cost of the Cadillacs purchased for conversion by Limousine A) fixed cost B) mixed cost C) step-variable cost D) variable cost Answer Conversion Company would best be described as a: g purchased from a For an automobile manufacturer, the cost of a driver's side air ba supplier and installed A) fixed cost. B) mixed cost. C) step-variable cost. D) variable cost. Answer in every automobile would best be described as a: 6.With respect to a fixed cost, an increase in the activity level within the relevant range results in: A) an increase in fixed cost per unit. B) a proportionate increase in total fixed costs. C an unchanged fixed cost per unit. D) adecrease in fixed cost per unit. Answer

Explanation / Answer

1 D With change in activities, variable cost will increase/decrease however per unit variable cost, no impact Hence cost per unit of B has remain unchanged 2 C Unit Fixed Cost and Total Variable cost Since total fixed cost will remain same, with change in activity per unit will change. 3 B Step Variable Cost 4 D Variable Cost 5 D Variable Cost 6 D Decrease in fixed cost per unit 7 B Flexible Budget

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