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QUESTION
In the long run, All costs are fixed. All costs are mixed. All costs are variable. Paying a monthly 'budget' amount for utilities is a fixed cost.
- In the long run,
- All costs are fixed.
- All costs are mixed.
- All costs are variable.
- Paying a monthly 'budget' amount for utilities is a fixed cost.
- Which of the following is most likely a variable cost?
- Depreciation taken on an office building,
- Wages for production workers,
- Interest on corporate bonds,
- Rent on an office building,
- None of the above.
- Which of the following is most likely a fixed cost?
- The cost of commissioned sales people,
- Depreciation taken on equipment,
- The cost of merchandise sold,
- Income taxes,
- All of the above.
- The use of operating leverage
- requires a teeter totter to be installed in the office,
- requires the firm to have only variable costs,
- increases the breakeven level,
- eliminates all fixed costs,
- none of the above.
- Having a high degree of operating leverage is
- Good, when the economy is good
- Good, when the economy is bad
- Always good
- Always bad
- The goal of breakeven analysis is to
- avoid paying taxes,
- earn as much as your competitors,
- set variable costs equal to fixed costs,
- determine long-term investment levels,
- determine the minimum volume of business to avoid a loss.
- Which costs are generally not allocated?
- fixed costs
- direct costs
- variable costs
- indirect costs
- none of the above
- In a multi-service facility, which of the following is direct cost?
- Electricity,
- Custodial services,
- Depreciation on the building,
- Nurse pay in one department,
- All of the above are direct costs.
- Comparing a capitated environment to a fee-for-service environment; in a capitated environment
- each additional visit creates costs without a corresponding increase in revenues,
- the total revenues line on a CVP graph is flat rather than upward sloping,
- less utilization rather than more utilization enhances profitability,
- providers of health services also take on an insurance function,
- all of the above.
- A good cost driver does all of the following except
- Allocates costs fairly.
- Helps in controlling costs.
- Can be traditional or activity based.
- Provides greater benefits than its cost.
- All of the above are elements of a good cost driver.
