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BUS 590 Week 1 Quiz Ashford
Question 1. In describing the cost equation, Y = a + bX, "a" is:
1. the dependent variable cost.
2. the independent variable the level of activity.
3. the total fixed cost.
4. the variable cost per unit of activity.
Question 2. For planning, control, and decision-making purposes:
1. fixed costs should be converted to a per unit basis.
2. discretionary fixed costs should be eliminated.
3. variable costs should be ignored.
4. mixed costs should be separated into their variable and fixed components.
Question 3. All of the following costs would be found in a company's accounting records except:
1. sunk cost.
2. opportunity cost.
3. indirect costs.
4. direct costs.
Question 4. A traditional format income statement organizes costs on the basis of behavior.
Question 5. A contribution format income statement for a merchandising company organizes costs into two categories—cost of goods sold and selling and administrative expenses.
Question 6. Cost behavior is considered linear whenever a straight line is a reasonable approximation for the relation between cost and activity.
Question 7. Question : Selling costs can be either direct or indirect costs.
Question 8. Manufacturing salaries and wages incurred in the factory are period costs.
Question 9. The costs of the Accounting Department at Central Hospital would be considered by the Surgery Department to be:
1. direct costs.
2. indirect costs.
3. incremental costs.
4. opportunity costs.
Question 10. Depreciation on office equipment would be included in product costs.