Question

7. When the activity level dectlines within the relevant range, what shovuld happen with respect to dhe following? Fixed cost per unit Variable cost per unit change Increase Increase No change No change No change a. Option C b. Option D c. Option B d. Option A 8. An example of a discretionary fixed cost would be: a. depreciation on manufacturing equipment b. insurance. c. research and development. d. taxes on the factory 9. Contribution margin means: a. the sum of cost of goods sold and variable expenses. b. what remains from total sales after deducting fixed expenses. c. what remains from total sales after deducting all variable expenses. d. what remains from total sales after deducting cost of goods sold a. a cost which may be shifted to the future with little or no effect on current operations. b. a cost which does not entail any dollar outlay but which is relevant to the decision-making process. c. a cost which cannot be avoided because it has already been incurred d. a cost which may be saved by not adopting an alternative. 10. A sunk cost is:

Answer 1

Please note as per rules i need to answer only 1st question but still i am answering all questions

1. When a activity level declines within the relevant range then the Fixed cost per unit will increase whereas there will be no change in variable cost per unit. therefore correct answer is option a.Option C

2. Discretionary fixed cost is Research & Development.

3.Contribution margin means what remains from total sales after deducting all variable expenses i.e C

4. Sunk cost is a cost which cannot be avoided because it has already been incurred i.e. C