A cost function where the cost remains constant regardless of variations in the activity level falls under __________?
Show answer Hide answer
Answer: D. step cost functions
Explanation
A step cost function remains constant over certain activity ranges but changes in discrete amounts when activity shifts significantly.
- Subject
- Accounting and Finance
- Category
- Accounting
- Topic
- —
- Difficulty
- medium
Related questions
Q1. Corporate-sustaining costs and distribution-channel costs are also classified as _________?
Show answer Hide answer
Answer: C. fixed costs
Corporate-sustaining and distribution-channel costs generally do not change with individual unit production levels. Because they remain constant across normal operating ranges, they are appropriately classified as fixed...
Q2. If the contribution margin is $500 per unit and the breakeven level is 35 units, the fixed cost would be ___________?
Show answer Hide answer
Answer: D. $17,500
Fixed costs equal the unit contribution margin multiplied by the breakeven units to cover all expenses. Multiplying five hundred dollars by thirty-five units yields seventeen thousand five hundred dollars total. At the b...
Q3. Firms within an industry that buy finished goods and resell them to the market are classified as ______________?
Show answer Hide answer
Answer: D. merchandising sector companies
Merchandising sector companies purchase finished goods and resell them to consumers without altering their physical form. These firms act as intermediaries between manufacturing producers and the ultimate retail marketpl...
Q4. A budget that shows the variance between the actual and budgeted quantities is referred to as _____________?
Show answer Hide answer
Answer: B. flexible budget variance
A flexible budget variance measures the difference between actual results and the flexible budget based on actual output. This variance isolates performance efficiency by adjusting budgeted revenues and costs for actual...
Q5. Subtracting conversion cost from direct manufacturing labor cost yields the ____________?
Show answer Hide answer
Answer: D. manufacturing overhead cost
Manufacturing overhead cost is found by taking total conversion costs and subtracting direct manufacturing labor costs. Conversion costs comprise both direct labor and manufacturing overhead expenses combined. Isolating...
Q6. A cost management method that specifically targets strategic matters is categorized as ____________?
Show answer Hide answer
Answer: C. strategic cost management
Strategic cost management integrates cost data with business strategy to manage and reduce costs while strengthening market position. This approach focuses on long-term competitive advantage rather than just short-term e...