1.
The formula, Electricity cost =
$10 + ($0.08 x kwh used) is the formula for a
a.
Mixed cost.
b.
Fixed cost.
c.
Step cost.
d.
None of the above.

2.
Mounce Corporation leases a
color copier for a monthly fee of $75 plus a charge of $0.02 per copy. Mounce’s
copy cost is classified as a:
a.
Variable cost.
b.
Fixed cost.
c.
Step variable cost.
d.
Mixed cost.

3.
Mike Mounts has a membership at
the Marigold Men’s Fitness Club. The membership costs $30 per month regardless
of how many times the facility is used. The membership cost is classified as a:
a.
Variable cost.
b.
Fixed cost.
c.
Step variable cost.
d.
Mixed cost.

4.
Which of the following is not an example of a variable cost?
a.
Direct material
b.
Indirect material
c.
Direct labor.
d.
President of the company’s
salary.

5.
Which of the following is not an example of a fixed cost?
a.
Rent on factory warehouse
b.
Insurance on factory equipment
c.
Indirect material
d.
Advertising costs

6.
An example of a committed fixed
cost is
a.
Advertising.
b.
Lease on warehouse space.
c.
Sales commissions.
d.
All of the above.

7.
An example of a discretionary
fixed cost is
a.
Research and development costs.
b.
Lease on warehouse space.
c.
Sales commissions.
d.
All of the above.

8.
Total cost is a combination of
fixed and variable costs. The algebraic equation, where T = total costs, v =
variable costs, x = units produced, and f = fixed costs, for total cost is:
a.
T = v(x) + f
b.
T = v + f
c.
T = v(x) – f
d.
T = f(x) + v

9.
Which of the following is not a method of estimating costs?
a.
Scattergraphs
b.
Bar charts
c.
The high-low method
d.
Regression analysis

10.
Which of the following is not a method of estimating costs?
a.
Scattergraphs
b.
The high-low method
c.
Regression analysis
d.
All of the above are methods of
estimating costs.

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