16) Linear-cost behaviour

A) is linear over the entire range of production.

B) cannot be graphed as a straight line.

C) exists when a cost changes proportionately with changes in a cost driver.

D) can be used to graph a step cost.

17) An example of a volume-driven cost in a book publishing enterprise is

A) wages of editorial staff.

B) paper and ink.

C) rent on the factory.

D) accounts payable clerk’s wages.

18) Costs that change abruptly at intervals of activity because the resources and their costs come in indivisible chunks are called

A) mixed costs.

B) variable costs.

C) fixed costs.

D) step costs.

19) The following three data points appear to be

Units

Costs

100

$200

110

220

120

24

A) a variable cost.

B) a mixed cost.

C) a fixed cost.

D) a step cost.

20) The following three data points appear to be

Units

Costs

200

$400

220

400

240

400

A) a variable cost.

B) a mixed cost.

C) a fixed cost.

D) a step cost.

21) The following three data points appear to be

Units

Costs

100

$400

110

420

120

440

A) a variable cost.

B) a mixed cost.

C) a fixed cost.

D) a step cost.

22) ________ are the fixed costs of being able to achieve a desired level of production or to provide a desired level of service, while maintaining product or service attributes, such as quality.

A) Capacity costs

B) Committed fixed costs

C) Discretionary fixed costs

D) None of the above

23) ________ are costs arising from the possession of facilities, equipment, and a basic organization.

A) Capacity costs

B) Committed fixed costs

C) Discretionary fixed costs

D) None of the above

24) ________ are costs that have no obvious relationship to levels of output activity but are determined as part of the periodic planning process.

A) Capacity costs

B) Committed fixed costs

C) Discretionary fixed costs

D) None of the above

25) Strategic decisions about the scale and scope of an organization’s activities generally result in fixed levels of

A) capacity costs.

B) discretionary costs.

C) mixed costs.

D



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