Question : 71. Classifying costs by behavior involves: A. Identifying fixed cost and variable cost. B. Identifying : 1225455

71. Classifying costs by behavior involves: 

A. Identifying fixed cost and variable cost.

B. Identifying cost of goods sold and operating costs.

C. Identifying all costs.

D. Identifying costs in a physical manner.

E. Identifying both quantitative and qualitative cost factors.

72. A classification of costs that is useful for assigning responsibility to and evaluating managers is: 

A. Classification by traceability.

B. Classification by behavior.

C. Classification by relevance.

D. Classification by function.

E. Classification by controllability.

73. A mixed cost: 

A. Requires the future outlay of cash and is relevant for future decision making.

B. Does not change with changes in the volume of activity within the relevant range.

C. Is directly traceable to a cost object.

D. Contains a combination of fixed costs and variable costs.

E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

74. A fixed cost: 

A. Requires the future outlay of cash and is relevant for future decision making.

B. Does not change with changes in the volume of activity within the relevant range.

C. Is directly traceable to a cost object.

D. Changes with changes in the volume of activity within the relevant range.

E. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

75. Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected?

A. Choice A

B. Choice B

C. Choice C

D. Choice D

E. Choice E

76. A primary difference between variable costs and fixed costs is: 

A. Variable costs per unit change in varying increments while fixed costs per unit change in equal increments over the relevant range of activity.

B. Variable costs per unit fluctuate and fixed costs per unit remain constant over the relevant range of activity.

C. Variable costs per unit are fixed and fixed costs per unit are variable over the relevant range of activity.

D. Variable costs per unit change in equal increments while total fixed costs change in proportion to the level of activity over the company’s relevant range.

E. Total variable costs are fixed and fixed costs per unit never change over the relevant range of activity.

77. Period costs for a manufacturing company would flow directly to: 

A. The current income statement.

B. Factory overhead.

C. The current balance sheet.

D. Job cost sheet.

E. The current manufacturing statement.

78. For product costs associated with a particular product to be expensed on the income statement: 

A. The product must be transferred to Finished Goods Inventory.

B. The product must still be in Goods In Process Inventory.

C. The product must be sold.

D. The product may be in any of the manufacturer’s inventory accounts.

E. The company must expect to sell the product during the next twelve months.

79. Costs that are first assigned to inventory are called: 

A. Period costs.

B. Product costs.

C. General costs.

D. Administrative costs.

E. Fixed costs.

80. Costs that flow directly to the current income statement are called: 

A. Period costs.

B. Product costs.

C. General costs.

D. Balance sheet costs.

E. Capitalized costs.