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ACG 3351 Week 2 Quiz (Everest)

1. Outside of the relevant range, variable and fixed cost-behavior patterns may change.

2. Full costs of a product include variable costs, but not fixed costs.

3. A cost may be relevant for one decision, but not relevant for a different decision.

4. A manager is able to increase operating income by deferring maintenance beyond the current accounting period when absorption costing is used.

5. An example of a physical cause-and-effect relationship is when additional units of production increase total direct material costs.

6. The amount paid to purchase tools last month is an example of a sunk cost.

7. All cost functions are linear.

8. The industrial engineering method uses a formal mathematical method to identify cause-and-effect relationships among past data observations.

9. A linear cost function can only represent fixed cost behavior.

10. y = a + bX represents the general form of the linear cost function.

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