Question

25) Variable costs vary in total and vary per unit (within the relevant range).

True False

26) On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the line

representing total costs (variable costs and fixed costs).

True

False

28. Depreciation expense on an office copier used by the CEO in the administrative building is a product cost

and a noncash expense.

True

False

29. One disadvantage of top down budgeting is budgetary slack.

True False

Answer 1

25 :- variable cost refers to the cost which varies with the variation in other factors like sales or production.

Example :- sales commission is variable cost which varies with the varies with the total sales made.

The given statement is TRUE.

26 :- cost volume profit graph represents the profit of the organisation with the help of two line those are cost line and sales revenues line. The organisation is profitable if and only if the sale revenue line overcome or steps over the cost line.

The given statement is TRUE.

28 :- all depreciation expense are non cash expense but the cost which are directly attributable to the production of products are only termed as product cost. Product cost includes direct material, direct labour, direct expenses incurred for production of products.

In the given case the depreciation of office copier which is used in the administration. This expense is indirect expense for the organisation which means it does not form part of product cost.

The given statement is FALSE.

29 :- budgetary slack means setting the targets of the managers by the same managers. In organisation if the managers are entitled to set their own targets then there is a chance of setting lower targets which are not good for organization. This type of power will be given to lower level managers in bottom up approch but not in the top down approach.

This budgetary slack is disadvantage of bottom down approach but not a disadvantage of top down approach.

The given statement is FALSE.

these are all the information required to solve the given questions.

I hope, all the above mentioned information and explanations are useful and helpful to you.

Thank you.