Reference no: EM132631871

Problem 1: Assumptions underlying cost-volume-profit analysis include all of the following, except:

Option 1: all costs can be divided into fixed and variable elements.

Option 2: total variable costs are directly proportional to volume over the relevant range.

Option 3: selling prices are to be unchanged.

Option 4: sales price is the only relevant factor affecting cost.

Problem 2: A basic assumption of activity-based costing (ABC) is that:

Option 1: All manufacturing costs vary directly with units of production.

Option 2: Products or services require the performance of activities, and activities consume resources.

Option 3: Only costs that respond to unit-level drivers are product costs.

Option 4: Only variable costs are included in activity-cost pools.

Problem 3: In a traditional job order cost system, the use of direct labor on jobs increases:

Option 1: stores.

Option 2: work in process.

Option 3: factory overhead.

Option 4: finished goods.

Problem 4: A cost driver is defined as:

Option 1: the largest cost in a manufacturing process.

Option 2: the significant factor in the development of a new product.

Option 3: an indirect cost that cannot be traced to a particular cost objective but is essential to the business.

Option 4: a causal factor that increases the total cost of a cost objective.