True / False Questions
1.Costs which increase in total amount in direct proportion to an increase in output are called variable costs.
2.When cost-volume-profit analysis is used, the need for a cost accounting system is eliminated.
3.With variable costs, the cost per unit varies with changes in volume.
4.With fixed costs, the cost per unit varies with changes in volume.
5.Any business which operates at less than capacity will have smaller fixed costs than variable costs.
6.Executive salaries are typically considered variable costs.
7.As volume increases, per unit variable costs will decrease on a per-unit basis and stay the same in total.
8.As volume increases, per unit fixed costs stay the same.
9.As volume increases, total fixed costs remain the same.
10.One characteristic common to all types of costs is the tendency to rise and fall in direct proportion to changes in the volume of business output.