Account Cost

Chapter 3--Cost BehaviorChapter 3--Cost Behavior

Student: ___________________________________________________________________________

1. Cost behavior analysis focuses on how costs

A. react to changes in profit.

B. change over time.

C. react to changes in activity level.

D. both a and c.

2. __________ explain changes in costs as units produced change.

A. Non-unit-level drivers

B. Activity based cost drivers

C. Unit-level drivers

D. All of these

3. __________ explain changes in costs as factors other than changes in units produced.

A. Functional based cost drivers

B. Non-unit-based cost drivers

C. Unit-based cost drivers

D. None of these

4. In a traditional cost management system, cost behavior is assumed to be driven only by

A. unit based cost drivers.

B. non-unit level cost drivers.

C. activity-based cost drivers.

D. none of these.

5. Which of the following would be an example of a unit-based cost driver?

A. engineering orders

B. direct labor hours

C. inspection hours

D. material moves

6. A supervisor's salary of $2,000 per month is an example of a

A. fixed cost.

B. variable cost.

C. step cost.

D. mixed cost.

7. When the volume of activity increases within the relevant range, the fixed cost per unit

A. decreases.

B. decreases at first, then increases.

C. remains the same.

D. increases.

8. Fixed cost per unit is $9 when 20,000 units are produced and $6 when 30,000 units are produced. What is the total fixed cost when nothing is produced?

A. $120,000

B. $270,000

C. $15

D. $180,000

9. The range of activity within which a linear cost function is valid is called the

A. normal range.

B. relevant range.

C. activity range.

D. none of these.

10. Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis, which of the following costs would be represented by a line that is parallel to the horizontal axis?

A. total direct material costs

B. a consultant...