1. when cost driver activity increases, the fixed cost per unit of cost driver

1) increases 2) remains the same 3) decreases at first, then increases 4) cannot be determined 5) decreases

2. baker airlines developed a cost function for food costs of TC = $8000 + 1.60* miles flown. The best estimate of food costs at 10000 miles is

1) 17600 2) none of the responses are correct 3) 26000 4) 24000 5) 16000

3. anders company incurred 12000 in utility cost when the cost driver level was 10000 and 9000 in utility cost when the cost driver level was 6000. what is the cost function of utility cost?

1) 1.20 per cost driver unit 2) 4500 plus 0.75 per cost driver unit 3) 1.50 per cost driver unit 4) 3000 plus 3.00 per cost driver unit

4. the contribution margin at the break-even point

1) plus total fixed costs equals total revenues 2) is less than total fixed costs 3) equals total fixed costs 4) is zero 5) is greater than variable costs

5. A company has total fixed costs of 120000 and a contribution margin ratio of 20%. the total sales necessary to break even are

1) 600000 2) 150000 3) 144000 4) 480000

6. an increase in the cost driver activity results in

1) an increase in fixed cost per unit of cost driver 2) an unchanged fixed cost per unit of cost driver 3) a proportionate increase in total fixed costs. 4) a decrease in fixed cost per unit of cost driver.