1. What has the increased use of automation and less use of the work force in companies caused a trend towards an increase in?
both variable and fixed costs
fixed costs and a decrease in variable costs
variable costs and a decrease in fixed costs
variable costs and no change in fixed costs
2. To which function of management is CVP analysis most applicable?
Planning
Motivating
Directing
Controlling
3. What is an example of a mixed cost?
direct materials.
supervisory salaries.
utility costs.
property taxes.
4. What does a mixed cost contain?
a variable element and a fixed element
both selling and administrative costs
both retailing and manufacturing costs
both operating and non operating costs
5. If ABC Airlines cuts its domestic fares by 30%,
its fixed costs will decrease.
profit will increase by 30%.
a profit can only be earned by decreasing the number of flights and reducing the number of airline employees.
a profit can be earned by increasing the number of passengers or by decreasing variable costs.