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TRUE or FALSE. Write The Word TRUE Is Correct And..
TRUE or FALSE. Write The Word TRUE Is Correct And..
2. A fixed cost remains constant in total and on a per unit basis at various levels of activity.
4. If the activity index decreases, total variable costs will decrease proportionately.
5. Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite direction
6. For CVP analysis, both variable and fixed costs are assumed to have a linear relationship within the relev
7. The relevant range of activity is the activity level where the firm will earn income.
8. Costs will not change in total within the relevant range of activity.
9. The high-low method is used in classifying a mixed cost into its variable and fixed elements.
10. A mixed cost has both selling and administrative cost elements.
11. The fixed cost element of a mixed cost is the cost of having a service available.
12. The difference between the costs at the high and low levels of activity represents the fixed cost element
13. When applying the high-low method, the variable cost element of a mixed cost is calculated before the f
14. In CVP analysis, the term cost includes manufacturing costs, and selling and administrative expenses.
15. Contribution margin is the amount of revenues remaining after deducting cost of goods sold.
16. Unit contribution margin is the amount that each unit sold contributes towards the recovery of fixed cost
17. The contribution margin ratio is calculated by multiplying the unit contribution margin by the unit sales pr
18. Both variable and fixed costs are included in calculating the contribution margin.
19. The break-even point is where total sales equals total variable costs.
20. The break-even point is equal to the fixed costs plus net income.
21. If the unit contribution margin is $1 and unit sales are 5,000 units above the break-even volume, then ne
22. The margin of safety is the difference between contribution margin and fixed costs.
23. A target net income is calculated by taking actual sales minus the margin of safety.
24. A CVP income statement shows contribution margin instead of gross profit.