7. A fixed cost within the relevant range a. increases in total as output decrea
ID: 2332207 • Letter: 7
Question
7. A fixed cost within the relevant range
a.
increases in total as output decreases.
b.
does not change in total as output changes.
c.
decreases in total as output increases.
d.
All of these are correct.
8. Which of the following would be an example of a fixed cost?
a.
wages for an assembly line worker
b.
electric bill
c.
depreciation on equipment
d.
materials used
9. Which of the following would not be an example of a fixed cost?
a.
glue used to put together tables
b.
insurance on factory building
c.
depreciation on factory building
d.
property taxes
10. Discretionary fixed costs
a.
cannot be easily changed.
b.
often involve a long-term contract.
c.
can be changed easily at management's discretion.
d.
increase as output increases.
11. Which of the following is an example of a discretionary fixed cost?
a.
depreciation of equipment
b.
advertising costs
c.
rental of machinery
d.
insurance on automobiles
7. A fixed cost within the relevant range
a.
increases in total as output decreases.
b.
does not change in total as output changes.
c.
decreases in total as output increases.
d.
All of these are correct.
Explanation / Answer
7. The answer is " b. does not change in total as output changes. "
8. The answer is " c. depreciation on equipment "
9. The answer is " a. glue used to put together tables "
10. The answer is " c. can be changed easily at management's discretion "
11. The answer is " b. advertising costs "
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