An example of a cost likely to have a fixed behavior pattern is:
advertising cost.
Expressing fixed costs on a per unit basis of activity is misleading because:
fixed cost per unit decrease as activity increases.
Which of the following is the correct calculation for the contribution margin ratio?
Contribution margin divided by sales revenue.
A management decision that would have a long term influence on the operating leverage of a firm would be:
substituting robots for hourly paid production workers.
Which of the following statements does not describe a characteristic of management accounting?
Management accounting must conform to GAAP.
Managerial accounting, as opposed to financial accounting, is primarily concerned with:
present and future planning and control.
The contribution margin format income statement:
uses a behavior pattern classification for costs rather than a functional cost classification approach.
The term “relevant range” refers to:
the range of activity where cost relationships are valid.
Relevant costs in decision-making:
are future costs that represent differences between decision alternatives.
Which of the following costs are not relevant in a decision to continue or discontinue a segment of the organization?
unavoidable costs.