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# Top of Form A variable cost is a cost that Choose one answer.

### Resolved Question:

Top of Form
A variable cost is a cost that

a. varies per unit at every level of activity.

b. occurs at various times during the year.

c. varies in total in proportion to changes in the level of activity.

d. may or may not be incurred, depending on management's discretion.
Question 2
Marks: 2
A fixed cost is a cost which

a. varies in total with changes in the level of activity.

b. remains constant per unit with changes in the level of activity.

c. varies inversely in total with changes in the level of activity.

d. remains constant in total with changes in the level of activity.
Question 3
Marks: 2
Which of the following is not a cost classification?

a. Mixed

b. Multiple

c. Variable

d. Fixed
Question 4
Marks: 2
Which of the following is not a fixed cost?

a. Direct materials

b. Depreciation

c. Lease charge

d. Property taxes
Question 5
Marks: 2
At the high level of activity in November, 7,000 machine hours were run and power costs were \$12,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to \$6,000. Using the high-low method, the estimated fixed cost element of power costs is

a. \$12,000

b. \$6,000

c. \$3,600

d. \$8,400
Question 6
Marks: 2
Which of the following is not a mixed cost?

a. Car rental fee

b. Electricity

c. Depreciation

d. Telephone Expense
Question 7
Marks: 2
Contribution margin

a. is always the same as gross profit margin.

b. excludes variable selling costs from its calculation.

c. is calculated by subtracting total manufacturing costs per unit from sales revenue per unit.

d. equals sales revenue minus variable costs.
Question 8
Marks: 2
Hartley, Inc. has a product with a selling price per unit of \$200, the unit variable cost is \$75, and the total monthly fixed costs are \$300,000. How much is Hartley’s contribution margin ratio?

a. 62.5%

b. 37.5%

c. 150%

d. 266.6%
Question 9
Marks: 2
Why are budgets useful in the planning process?

a. They provide management with information about the company's past performance.

b. They help communicate goals and provide a basis for evaluation.

c. They guarantee the company will
Submitted: 7 years ago.
Category: Homework
Expert:  Marty28 replied 7 years ago.