1. Which of the following statements is true regarding average fixed costs?

a. Average fixed costs per unit fall as the level of activity rises.

b. Average fixed costs per unit remain fixed regardless of activity.

c. Average fixed costs per unit rise as the level of activity rises.

d. Average fixed costs per unit cannot be determined.

2. Which of the following methods of cost estimation relies on only two data points?

a. the high-low method

b. account analysis

c. SWOT analysis

d. least-squares regression

3. A scatter graph is used to test the assumption that the relationship between cost and activity level is __________________________.

a. linear

b. cyclical

c. curvilinear

d. upredictable