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1. Which costs will change with an increase in activity within the relevant range?

- Unit fixed cost and total fixed cost
- Unit variable cost and total variable cost
- Unit fixed cost and total variable cost
- Unit fixed cost and unit variable cost

2. Salaries of accounts receivable clerks when one clerical worker is needed for every 750 accounts receivable is an example of a:

- step-variable cost
- mixed cost
- curvilinear cost
- fixed cost

3. With respect to a fixed cost, an increase in the activity level within the relevant range results in:

- an increase in fixed cost per unit.
- a decrease in fixed cost per unit.
- an unchanged fixed cost per unit.
- a proportionate increase in total fixed costs

4. In the standard cost formula Y = a + bX, what does the "Y" represent?

- total cost
- total variable cost
- variable cost per unit
- total fixed cost

5. In the standard cost formula Y = a + bX, what does the "a" represent?

- variable cost per unit
- total cost
- total variable cost
- total fixed cost

6. Contribution margin is computed as sales revenue minus:

- variable expenses
- cost of goods manufactured
- cost of goods sold
- fixed expenses

7. Which of the following approaches to preparing an income statement calculates gross margin?

- Item A
- Item B
- Item C
- Item D

8. The least-squares regression method:

- is generally less accurate than the scattergraph method.
- can be used only if the fixed cost element is larger than the variable cost element.
- is the only method acceptable under generally accepted accounting principles.
- fits a regression line by minimizing the sum of the squared errors from the regression line.

9. A is a fixed cost; B is a variable cost. During the current year the level of activity has decreased but is still within the relevant range. We would expect that:

- The cost per unit of A has decreased.
- The cost per unit of B has remained unchanged.
- The cost per unit of A has remained unchanged.
- The cost per unit of B has decreased.

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