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ch 19 quiz - PRACTICE QUIZ 1 C19 True-False 1 Managers use...

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PRACTICE QUIZ 1 C19 True-False 1. Managers use their knowledge of cost behavior to estimate the impact of changes in operations (such as changing output volume) on future profitability. 2 The traditional definition of variable cost assumes a linear relationship between cost and some measure of volume or output. 3. Both total fixed costs and fixed cost per unit are assumed to remain constant within the relevant range. 4. The high-low method is useful in identifying the fixed and variable components of a mixed cost. 5. Although the long-term goal in a just-in-time operating environment is to approach theoretical capacity, companies never operate at this level. 6. Service businesses do not have any overhead costs. 7. Contribution margin per unit is selling price per unit minus fixed costs per unit. Multiple Choice 8. As production decreases, one would expect the variable cost per unit to A. decrease. B. increase. C. remain unchanged. D. decrease and then increase. E. do none of the above.
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