Question 1

Variable costs are described by which of the following statements?

		The variable cost per unit increases as production volume increases
		They are fixed in total and decreases per unit as production volume increases
		They are fixed per unit and increases in total as production volume increases
		They decrease per unit as production volume increases

Question 2

Which of the following costs is an example of a fixed cost?

		Sales commissions
		Salary of plant manager
		Direct materials
		Delivery costs

Question 3

Total fixed costs for Taylor Incorporated are $240,000. Total costs, including both fixed and variable, are $500,000 if 125,000 units are produced. What is the variable cost per unit?

		$5.92 per unit
		$2.08 per unit
		$4.00 per unit
		$1.92 per unit