More than one answer may be correct under limited business operating conditions. You are to select only one answer. The one that is most correct under normal business operating conditions.
1 ABC Inc. uses a cost structure that includes some specific cost categories that behave as fixed costs, some variable costs, and some mixed costs. As ABC's activity ( units produced and sold) level increases the average cost (on a per unit basis) for each of the three cost types above will
a) decrease, increase, increase
b) decrease, decrease, increase
c) not change, not change, not change
d) not change, increase, increase
e) increase, decrease, no change
f) decrease, no change, decrease
2 The budgeting process usually begins with forecasting the value of future
a) Cash Flow
b) Costs as a percentage of Sales
c) Sales
d) Labor costs