A fixed cost is fixed only in relation to a given

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Community Nutrition in Action: An Entrepreneurial Approach
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Chapter 19 / Exercise 5
Community Nutrition in Action: An Entrepreneurial Approach
Boyle/Holben
Expert Verified
23) A fixed cost is fixed only in relation to a given wide range of total activity or volume andonly for a given time span, usually a particular budget period.
Diff: 2Objective: 3AACSB: Application of knowledge24) A cost driveris a variable, such as the level of activity or volume that causally affects costs over a given time span.
Diff: 1Objective: 3AACSB: Analytical thinking25) Fixed cost per unit falls with an increase in production volume.
Diff: 2Objective: 3AACSB: Analytical thinking26) Variable costs per unit vary with the level of production or sales volume.
Diff: 2Objective: 3AACSB: Analytical thinking27) Wood used to manufacture chairs is considered a direct variable cost when the cost object is the chair.
Diff: 1Objective: 3AACSB: Analytical thinking28) Cost drivers casually affect total costs of a cost object over a given time span.
Diff: 1Objective: 3AACSB: Analytical thinking29) A fixed cost remains unchanged in total for a given time period, despite wide changes in the related level of total activity or volume of output produced.
Diff: 1Objective: 3AACSB: Analytical thinking
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Community Nutrition in Action: An Entrepreneurial Approach
The document you are viewing contains questions related to this textbook.
Chapter 19 / Exercise 5
Community Nutrition in Action: An Entrepreneurial Approach
Boyle/Holben
Expert Verified
30) A lease for a store calls for a base monthly rent of $1,500 up to $10,000 of sales with a possible additional monthly cost of 2% of sales over $10,000. The rent is a fixed cost for the month for a relevant range of zero to $10,000 sales.
Diff: 2Objective: 3AACSB: Application of knowledge31) Butler Hospital wants to estimate the cost for each patient stay. It is a general health care facility offering only basic services and not specialized services such as organ transplants.Required:a.Classify each of the following costs as either direct or indirect with respect to each patient.b.Classify each of the following costs as either fixed or variable with respect to hospital costs per day.DirectIndirectFixedVariableElectronic monitoring________________________________Meals for patients________________________________Nurses' salaries________________________________Parking maintenance________________________________Security________________________________ Answer: DirectIndirectFixedVariableElectronic monitoringXXMeals for patientsXXNurses' salariesXXParking maintenanceXXSecurityXX Diff: 3Objective: 2, 3AACSB: Application of knowledge
32) The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column. That is, they do not match. FunctionRepresentative Cost Driver1.PurchasingA.Number of employees2.BillingB.Number of shipments3.ShippingC.Number of customers4.Computer SupportD.Number of invoices5.PersonnelE.Number of desktop computers6.Customer ServiceF.Number of purchase ordersRequired:Match each business function with its representative cost driver.

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