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Chapter 21 Cost Behavior and Cost Volume Profit Analysis
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Chapter 21 Cost Behavior and Cost Volume Profit Analysis Accounting 26th Ed by Warren -Test Bank
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CHAPTER 21: COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS1. Cost behavior refers to the methods used to estimate costs for use in managerial decision making.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.ACBSP.APC.29 - CVP Analysis
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
2. Cost behavior refers to the manner in which a cost changes as the related activity changes.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.ACBSP.APC.29 - CVP Analysis
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
3. The fixed cost per unit varies with changes in the level of activity.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 21: Cost Behavior and Cost-Volume-Profit Analysis
4. A production supervisor's salary that does not vary with the number of units produced is an example of a fixed cost.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
5. Direct materials cost that varies with the number of units produced is an example of a fixed cost of production.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
6. In order to choose the proper activity base for a cost, managerial accountants must be familiar with the
operations of the entity.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 21: Cost Behavior and Cost-Volume-Profit Analysis
7. The relevant range is useful for analyzing cost behavior for management decision-making purposes.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.ACBSP.APC.29 - CVP Analysis
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
8. The relevant activity base for a cost depends upon which base is most closely associated with the cost and the
decision-making needs of management.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.ACBSP.APC.29 - CVP Analysis
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
9. The range of activity over which changes in cost are of interest to management is called the relevant range.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 - Managerial Accounting Features/Costs
ACCT.ACBSP.APC.29 - CVP Analysis
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 21: Cost Behavior and Cost-Volume-Profit Analysis
10. Total fixed costs change as the level of activity changes.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
11. Because variable costs are assumed to change in direct proportion to changes in the activity level, the graph of
the variable costs when plotted against the activity level appears as a circle.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
12. Variable costs are costs that remain constant in total dollar amount as the level of activity changes.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.21-01 - 21-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.28 - Variable and Fixed Costs
ACCT.IMA.07 - Cost Management
ACCT.IMA.09 - Performance Measurement
BUSPROG: Analytic
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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