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C-V-P Analysis

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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 us ... eful 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 [Show More]

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