21) Which of the following statements is TRUE with respect to variable costs per unit?
A) They will decrease as production increases within the relevant range.
B) They will increase as production decreases within the relevant range.
C) They will remain the same as production levels change within the relevant range.
D) They will decrease as production decreases within the relevant range.
22) Which of the following statements is TRUE with respect to total variable costs?
A) They will remain the same as production levels change within the relevant range.
B) They will decrease as production increases within the relevant range.
C) They will decrease as production decreases within the relevant range.
D) They will increase as production decreases within the relevant range.
23) Which of the following statements is TRUE with respect to total fixed costs?
A) They will increase as production decreases within the relevant range.
B) They will remain the same as production levels change within the relevant range.
C) They will decrease as production increases within the relevant range.
D) They will decrease as production decreases within the relevant range.
24) Within the relevant range, which of the following statements is TRUE with respect to fixed costs per unit?
A) They will increase as production increases.
B) They will decrease as production decreases.
C) They will increase as production decreases.
D) They will remain the same as production levels change.
25) Which of the following is a characteristic of a variable cost?
A) Variable costs fluctuate in total with production and sales.
B) Variable costs are fixed in total.
C) Variable costs do not change in total over any range.
D) All of the above may be characteristic of a variable cost.
26) Which of the following is a fixed cost?
A) Direct materials cost
B) Direct labor cost
C) Sales commissions expense
D) Straight-line depreciation expense
27) Which of the following statements describes variable costs?
A) They are fixed per unit and vary in total.
B) They are fixed in total.
C) They vary per unit of output.
D) They decrease per unit as production volume increases.
28) Renting a car and paying $15 per day plus $.03 per mile driven is an example of what type of cost?
A) Conversion cost
B) Fixed cost
C) Mixed cost
D) Variable cost
29) For most businesses, annual straight line depreciation expense on the company's building is what type of cost?
A) Variable
B) Fixed
C) Mixed
D) Step
30) Total fixed costs for Herman Enterprises are $200,000. Total costs, both fixed and variable, are $550,000 if 100,000 units are produced. The variable cost per unit is:
A) $2.00/unit.
B) $7.50/unit.
C) $3.50/unit.
D) $5.50/unit.