quiz 2 (chapter 1)

Question 1

1. Which of the following costs would not be a product cost?
   A. Cost of air conditioning the factory foreman’s office
   B. Depreciation on machinery in the factory
   C. Indirect labor
   D. Sales commissions

Answer 1

D. Sales commissions

Question 2

2. Period costs include which of the following?
   A. Depreciation on the CEO’s company car
   B. General accounting costs
   C. Executive administrative costs
   D. All of the above

Answer 2

. All of the above

Question 3

As the activity that drives a variable cost increases, the total fixed cost per unit decreases.

A. True
B. False

Answer 3

. True

Question 4

Within the relevant range:
A. Variable costs vary in total
B. Fixed costs vary
C. Total variable costs are constant

Answer 4

A. Variable costs vary in total

Question 5

Fixed costs per unit vary.

A. True
B. False

Answer 5

True

Question 6

Variable costs per unit are constant
A. True
B. False

Answer 6

True

Question 7

As the cost driver increases then fixed costs increases
-A. True
B. False

Answer 7

False