In the relevant range, fixed overhead costs do not vary with cost driver activity. True False
In the relevant range, fixed overhead costs do not vary with cost driver activity.
True
False
Homework Answers
The correct answer for the question is Option A - True. Fixed overhead costs, as the name suggests are costs incurred by a company that remains constat irrespective of the level of activity. In other words,they do not change even if the level of volume produced by the company changes. Few of the examples of fixed overhead costs include, Rent of factory equipment, Office and administrative salaries, etc. When making decisions to accept special orders, make or buy, etc, generally Fixed overhead costs are not relevant as they continue to be incurred irrespective of taking the decision or not.
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In the relevant range, fixed overhead costs do not vary with
cost driver activity.
True
False
11) True or False: As activity decreases within the relevant range, fixed costs remain constant on...
11) True or False: As activity decreases within the relevant range, fixed costs remain constant on a per unit basis. 13) True or False: Within the relevant range, a change in activity results in a change in variable cost per unit and total fixed cost.
25) Variable costs vary in total and vary per unit (within the relevant range). True False...
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...
Fixed Factory and Variable Factory Overhead Cost : A. True or False / Fixed factory overhead changes...
Fixed Factory and Variable Factory Overhead Cost : A. True or False / Fixed factory overhead changes in total over the relevant range, based on production. B.True or False / Fixed factory overhead per unit does not change over the relevant range. C. True or False / Variable factory overhead does change in total over the relevant range. D. True or False / Activity based costing is used to allocate overhead cost pools based on single basis such as direct labor hours or machine...
Within the relevant range, a change in activity results in a change in variable cost per...
Within the relevant range, a change in activity results in a change in variable cost per unit and total fixed cost. True or False
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its...
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its cost driver activity changes within the relevant range, which of the following statements is/are correct? I. As the cost driver level increases, total fixed cost remains unchanged. II. As the cost driver level increases, unit fixed cost increases. III. As the cost driver level decreases, unit variable cost decreases. 1. I, II, and III are correct. 2. I and II only are correct. 3....
2. Total fixed costs regardless of changes in activity level (within a relevant range) Fixed costs...
2. Total fixed costs regardless of changes in activity level (within a relevant range) Fixed costs per unit in proportion to changes in activity level.
ter 5 Exam Question 1 Total fixed costs change with changes in volume of activity. True...
ter 5 Exam Question 1 Total fixed costs change with changes in volume of activity. True False Question 2 Per unit fixed costs change with changes in activity. True False Question 3 If a firm's activity expands beyond its relevant range, only fixed costs must be reevaluated. True False
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its...
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its cost driver activity changes within the relevant range, which of the following statements is/are correct? I. As the cost driver level increases, total fixed cost remains unchanged. II. As the cost driver level increases, unit fixed cost increases III. As the cost driver level decreases, unit variable cost decreases. 1. I only is correct. 2. I, II, and III are correct. 3. II and...
Relevant range 1.) is the range of activity over which our assumptions about cost behavior are...
Relevant range 1.) is the range of activity over which our assumptions about cost behavior are true 2.) only applies to fixed costs 3.) is defined as total sales minus break-even sales 4.) increases in total as the activity level increases
Question 1 Fixed cost per unit continuously declines as production increases (within the relevant range). This...
Question 1 Fixed cost per unit continuously declines as production increases (within the relevant range). This is called economies of scale. True False Question 2 The coefficient of determination or R squared, in regression analysis, should be less than 0.75 to indicate a strong cost equation. True False Question 3 ABC Co. has fixed costs of $85,000. ABC wants to achieve an after-tax profit of $10,000. The selling price per unit is $100, and the variable cost per unit is...
2. Total fixed costs regardless of changes in activity level (within a relevant range) Fixed costs per unit in proportion to changes in activity level.
ter 5 Exam Question 1 Total fixed costs change with changes in volume of activity. True False Question 2 Per unit fixed costs change with changes in activity. True False Question 3 If a firm's activity expands beyond its relevant range, only fixed costs must be reevaluated. True False
Frisco Corporation is analyzing its fixed and variable costs within its current relevant range. As its cost driver activity changes within the relevant range, which of the following statements is/are correct? I. As the cost driver level increases, total fixed cost remains unchanged. II. As the cost driver level increases, unit fixed cost increases III. As the cost driver level decreases, unit variable cost decreases. 1. I only is correct. 2. I, II, and III are correct. 3. II and...
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