ACC 2033 Exam 2

_____ varies directly and proportionally with changes in volume

• Fixed Cost per Unit

• Fixed Cost in Total

• Variable Cost per Unit

• Variable Cost in Total

• Step Costs

_______ varies inversely with the activity level

• Fixed Cost per Unit

• Fixed Cost in Total

• Variable Cost per Unit

• Variable Cost in Total

• Step Costs

______ remains constant in the short run, regardless of changes in activity.

• fixed cost per unit

• fixed cost in total

• variable costs per unit

• variable costs in total

• step costs

_____ constant over small ranges of output but increase as levels of activity increases

• fixed cost per unit

• fixed cost in total

• variable costs per unit

• variable costs in total

• step costs

The graph given represents?

The ______________ point is the amount of revenue required to cover expenses.

• profit

• break even

• liability

• balance

The average fixed cost per unit _________ when the level of activity increases

• Increases

• Decreases

• Stays the same

Which of the following statements is true about fixed costs?

• They vary on a per-unit basis with changes in the level of activity.

• They remain constant in total regardless of changes in the level of activity.

• They are directly proportional to the level of activity.

• They decrease on a per-unit basis as the level of activity increases.

Using cost-volume-profit (CVP) analysis, determine the break-even point in units for a company with fixed costs of 40,000, a selling price of 25 per unit, and variable costs of $15 per unit.

• 2000 units

• 3000 units

• 4000 units

• 5000 units

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DOK Level 4: Extended Thinking