Question1: With respect to a fixed cost, an increase in the activity level within the relevant range results in:
[A] An unchanged fixed cost per unit.
[B] A proportionate increase in total fixed costs
[C] An increase in fixed cost per unit.
[D] A decrease in fixed cost per unit.
Question2: Which of the following approaches to preparing an income statement calculates gross margin?
[A] Item A
[B] Item B
[C] Item C
[D] Item D
Question3: Salaries of accounts receivable clerks when one clerical worker is needed for every 750 accounts receivable is an example of a:
[A] curvilinear cost
[B] fixed cost
[C] step-variable cost
[D] mixed cost
Question4: The least-squares regression method:
[A] is the only method acceptable under generally accepted accounting principles.
[B] fits a regression line by minimizing the sum of the squared errors from the regression line.
[C] is generally less accurate than the scatter graph method.
[D] can be used only if the fixed cost element is larger than the variable cost element.