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k I READ ONLY - This is an older file for... 1. A cost that does not change as the level of business activity changes
k I READ ONLY - This is an older file for... 1. A cost that does not change as the level of business activity changes is a: a. fixed cost b. mixed cost c. variable cost d. semi-variable cost a 2. The break-even point is important to managers because it: a. tells managers how far sales can decline before the company will incur a loss b. determines the required sales in dollars to achieve a profit c. is useful to owners and managers starting a business d. Answers a and c are both correct. 3. The behavior of a variable cost is the opposite of the behavior of a: a. fixed cost b. liquid cost c. period cost d. mixed cost 4. If the selling price of an item increases, while all other costs are held constant, the break-even point in units will: a. increase b. decrease c. remain unchanged d. depend on the original sales price 5. When a cost no longer holds to its cost behavior pattern, the activity may be: a. a mixed cost b. a fixed cost c. an indeterminable cost d. outside the relevant range 6. The Duchess Bakery makes and sells fresh cookies. If the cookies sell for $1.60 each and they cost $0.85 to make plus an additional 20% of the selling price for selling and administrative variable costs, the variable cost per cookie is (rounded): a. $0.55 b. $1.06 c. $0.92 d. $1.17
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