Understanding Why C-V-P Analysis is Important
1. Which of the following items is NOT a key factor involved in cost-volume-profit (C-V-P) analysis? Answer: Time value of money
2. C-V-P analysis is useful to managers in:
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Understanding Why C-V-P Analysis is Important
1. Which of the following items is NOT a key factor involved in cost-volume-profit (C-V-P) analysis? Answer: Time value of money
2. C-V-P analysis is useful to managers in: Answer: All of these are correct
3. C-V-P analysis, while useful for several purposes, is primarily useful in: Answer: Planning
11.2 Basic Cost Behavior Patterns
1. Which of the following types of costs always change in total in proportion to changes in the level of activity of a firm? Answer: Variable costs
2. Within the relevant range, the fixed cost per unit: Answer: Decreases as activity level increases
3. The behavior of a cost is usually defined in terms of how that cost varies with respect to:
Answer: Level of activity
4. The type of cost that remains constant (in total) over the relevant range is a: Answer: Fixed cost
5. Relevant ranges must be considered for: Answer: Both fixed and variable costs
6. Within the relevant range, per-unit variable cost: Answer: Remains constant as activity level increases
7. Within the relevant range some fixed costs may actually be: Answer: Stepped costs
8. Fixed costs per unit: Answer: Decrease as activity levels increase
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