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Unformatted text preview: On-line Assignment 2True/False1. Within the relevant range, a change in activity results in a change in total variable cost and the per unit fixed cost.Ans: T2. A cost that is obtained in large chunks and that increases or decreases only in response to fairly wide changes in the activity level is known as a step-variable cost.Ans: T3. A variable cost fluctuates in total as activity changes but remains constant on a per unit basis over the relevant range.Ans: T4. Fixed cost per unit increases as activity decreases and decreases as activity increases.Ans: T5. The fact that the high-low method uses only two data points is a major defect of the method.Ans: T6. The following costs are all examples of committed fixed costs: depreciation on buildings, advertising, insurance, and management development and training.Ans: F7. The time frame in which discretionary fixed costs are controllable is usually much shorter than the time frame for committed fixed costs.Level: EasyAns: T8. The high-low method is generally less accurate than the least-squares regression method for analyzing the behavior of mixed costs.Ans: T9. Contribution margin equals revenue minus all variable costs.Ans: T10. The traditional income statement organizes costs on the basis of cost behavior.Ans: FMultiple Choice11. Within the relevant range, the variable cost per unit:A) remains constant as activity changes....
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This document was uploaded on 07/08/2011.
- Summer '11