Accounting 305 Chapter 7 Review Questions When volume increases, fixed costs per unit: A. Increase. B. Decrease. C. Stay the same. D. Increase or decrease, depending upon the situation. In cost-volume-profit analysis, income tax expense: A. Is included among the monthly operating expenses as a variable cost. B. Is considered a fixed cost of doing business. C. Is treated as a semi-variable cost that is partially dependent upon sales volume. D. Is generally ignored. A semi-variable cost: A. Increases and decreases directly and proportionately with changes in volume. B. Changes in response to a change in volume, but not proportionately. C. Increases if volume increases, but remains constant if volume decreases. D. Changes inversely in response to a change in volume. Which of the following is an example of a fixed cost for an airline? A. Depreciation on the corporate headquarters. B. Fuel costs. C. Income taxes expense. D. Passengers' meals. In order to calculate break-even sales units, fixed costs are divided by the: A. Contribution margin per unit. B. Contribution margin percentage. C. Target operating income. D. Sales volume.
A company's relevant range of production is: A. The production range from zero to 100% of plant capacity. B. The production range over which CVP assumptions are valid. C.
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