- Which of the following is an element of an operating plan?

a) Developing an organizational mission

b) Preparing financial statements .

c) Defining core values

d) Budgeting employee costs

- Mixed costs:

a) Vary with production in direct proportion to volume

b) Vary with production but not in direct proportion to volume

c) Do not vary with production

d) Include only different types of fixed costs

- Which of the following is not an assumption when estimating a cost function over the relevant range of activity?

a) Mixed costs will change in total

b) Mixed costs will change per unit

c) Variable costs will be constant in total

d) Fixed costs will be constant in total.

- Paulas Kennels is located in a small city in Nova Scotia. The company employs three pet attendants, four pet groomers, and two front office staff who book appointments and keep records. The Kennel provides a range of services for dogs and cats including boarding, grooming, and obedience training. The grooming area includes a small retail section that carries dog and cat food, pet supplies, and toys. If the cost object is cost per day of boarding, which of the following is a direct cost?

a) Pet food

b) Front office staff salaries

c) Grooming supplies

d) Depreciation on shelving and equipment used in the grooming and retail area

- What is the relationship between the margin of safety percentage and the degree of operating leverage?

a) They are unrelated

b) They are always the same

c) They are reciprocals

d) They are both subject to management bias