Costs that change abruptly at different levels of activitybecause the resources are available only in indivisible chunks arecalled ________.
A) mixed costs
B) variable costs
C) fixed costs
D) step costs
Answer:
A compensation plan where the sales force is paid salary pluscommission is a ________.
A) purely variable cost
B) mixed cost
C) step cost
D) fixed cost
Answer:
The break-even point on the cost-volume-profit graph is wherethe ________.
A) total cost line intersects the net profit line
B) total cost line intersects the net loss line
C) revenue line intersects the total cost line
D) revenue line intersects the variable cost line
Answer:
Suppose a hotel has annual fixed costs applicable to its roomsof $2.0 million for its 300-room hotel. Average daily room rentsare $50 per room and average variable costs are $10 for each roomrented. It operates 365 days per year. If the hotel is completelyfull throughout the year, what is net income for one year?
A) $1,280,000
B) $2,380,000
C) $3,180,000
D) $4,380,000
Answer:
Murphy Company produces dolls. Each doll sells for $20.00.Variable costs per unit are $14.00 and total fixed costs for theperiod are $435,000. What is the break-even point in units?
A) 21,750
B) 31,071
C) 51,176
D) 72,500