Question

Name Adrian Perez Test 2 Accounting 202 Chapters 19,20,21,22 True / False 1 point 1. An activity index identifies the activity that has a causal relationship with a particular cost. 2. 3. 4. A variable cost remains constant per unit at various levels of activity. A fixed cost remains constant in total and on a per unit basis at various levels of activity I volume increases, all costs will increase. 5. 6. If the activity index decreases, total variable costs will decrease proportionately. The CVP income statement classifies costs as variable or foxed and computes a contribution margin In CVP analysis, cost includes manufacturing costs but not selling and administrative expenses. 7. 8. When a company is in its early stages of operation, its primary goal is to generate a target net income. | | || | || HHHHHHH 9. The margin of safety tells a company how far sales can drop before it will be operating at a loss. 10. Sales mix is a measure of the percentage increase in sales from period to period. 11. An important step in management's decision-making process is to determine and evaluate possible courses of action. 12. In making decisions, management ordinarily considers both financial and nonfinancial information In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant. 13. 14. Accountants are mainly involved in developing nonfinancial information for management's consideration in choosing among alternatives. 15. Decision-making involves choosing among alternative courses of action.

Answer 1

Only first four questions are solved

Question 1

The activity index clearly states the costs of the product or services produced at various levels of activity.
Hence, the given statement is True.

Question 2

Variable costs vary directly vary with the level of output. However, only the total variable costs varies and not the per unit variable costs.
Hence, the given statement is True.

Question 3

Fixed costs remains constant in total at all activity levels. However, the per unit costs vary with different levels of activity.
Hence, the given statement is False.

Question 4

All costs comprises of Fixed costs and Variable costs. If volume increases, fixed costs remain constant but variable costs increases. So, all costs also increases with increase in volume.
Hence, the given statement is False.