Studied by 5 people
Which of the following is the primary source of revenue for a service business?
Providing intangible goods and services
Which of the following is the primary source of revenue for a merchandising business?
The purchase and resale of finished products
Which of the following is the. primary source of revenue for a manufacturing business?
The production of products from raw materials
Fixed costs are expenses that _____.
remain constant as activity changes
Variable costs are expenses that ______.
remain constant on a per-unit basis but change in total based on activity level
(not confidence in the answer)
Total costs for ABC Distributing are $250,000 when the activity level is 10,000 units. If variable costs are $5 per unit, what are their fixed costs?
$200,000
Which of the following methods of cost estimation relies on only 2 data points?
The high-low method
In the cost equation Y = a + bx, Y represents which of the following?
total costs
A scatter graph is used to test the assumption that the relationship between cost and activity level is ______.
linear
Fixed or Variable
Lumber used to construct decks ($12 per square foot)
variable
Fixed or Variable
Carpenter labor used to construct decks ($10 per hr)
variable
Fixed or Variable
Construction supervisor salary ($45,000 per year)
fixed
Fixed or Variable
Depreciation on tools and equipment ($6,000 per year)
fixed
Fixed or Variable
Selling and administrative expenses ($35,000 per year)
fixed
Fixed or Variable
Rent on corporate office space ($34,000 per year)
fixed
Fixed or Variable
Nails, glue, and other materials required to construct deck (varies per job)
variable
