PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. If volume increases, both total variables and total fixed costs will increase. Decrease in the level of activity will cause total variable and total fixed costs to decrease. When graphed, total variable costs and total fixed costs are both assumed to be linear within the relevant range.

PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. If volume increases, both total variables and total fixed costs will increase. Decrease in the level of activity will cause total variable and total fixed costs to decrease. When graphed, total variable costs and total fixed costs are both assumed to be linear within the relevant range.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following cost behavior assumptions is true? (You may select morethan one answer.)a. Variable costs are constant if expressed on a per unit basis.b. Total variable costs increase as the level of activity increases.c. The average fixed cost per unit increases as the level of activity increases.d. Total fixed costs decrease as the level of activity decreases
In describing the cost formula equation, Y = a + bX, which of the following is correct: Select one or more: a. (a) means variable cost per unit b. (X) means total variable cost V c. (a) means fixed cost d. (y) means total fixed costs
Within the relevant range, if there is a change in the level of the cost driver then a. Total fixed costs and total variable costs will change b. Totalfixed costs and total variable costs will remain the same C. Total fixed costs will remain the same and total variable costs will change d. Total fixed costs will change and total variable costs will remain the same.
Which of the following statements is correct: A. total fixed cost remain constant while variable cost as total increases as level of activities decreases. B. fixed cost per unit and total variable costs increases as level of activities increases. C. variable cost per unit and total fixed cost remain constant as level of activities increases. D. fixed cost per unit remain constant and variable cost per unit decreases as level of activities decreases.
The increase/decrease in variable cost from existing level to the new level is called as __cost. a.Standard b.Marginal c.Fixed d.Opportunity
(a) Variable Costs are costs that change in direct proportion to changes in activity level. (b) Unit variable cost remain constant regardless of the level of activity a. Both statements are true b. Both statements are false c. Statement A is true and statement B is false d. Statement A is false and statement B is true
Show how each of these costs will behave as the volume of activity decreases. Variable cost per unit Total variable cost Fixed cost per unit Total fixed cost A. Increase B. Decrease C. Remains the same
On a CVP graph, the total cost line intersects the vertical (dollars) axis at a. the origin. b. the level of the fixed costs. c. the breakeven point. d. the level of the variable costs.
When the level of activity increases, total fixed costs a. decrease. b. remain the same. c. increase. d. change, but the direction depends on the specific situation.
Which of the following statements regarding graphs of fixed and variable costs is true? (a) Variable costs can be represented by a straight line where costs are the same for each data point.(b) Fixed costs can be represented by a straight line starting at the origin and continuing through each data point.(c) Fixed costs are zero when production is equal to zero.(d) Variable costs are zero when production is equal to zero.(e) Fixed and Variable costs are curvilinear form above zero on the “Y” axis.
In the cost behavior equation, b*X denotes the variable cost per unit. Select one: O True O False
Within the relevant range, if there is a change in the level of the cost driver then a Total fxed costs and total variable costs will change b. Total fxed costs and total variable costs will remain the same C Total fixed costs will remain the same and total variable costs will change d. Total fxed costs will change and total variable costs will remain the same.