Cost terms
What cost changes when production changes?
Variable cost
Which method is more accurate for complex products: Traditional or ABC?
ABC
At break-even, profit is...
Zero
Fixed cost per unit increases as production increases.
False
What type of cost is both fixed and variable?
Mixed cost
Traditional costing uses how many overhead rates?
One
Does increasing fixed cost raise or lower the break-even point?
Raise
Contribution margin is revenue minus variable cost.
True
What is an example of an indirect cost?
Factory Rent, Supervisor Salary, etc.
ABC costing assigns overhead based on what?
Activities or cost drivers
Formula for contribution margin per unit?
Selling Price - Variable Cost per Unit
Depreciation is a variable cost.
False
Direct materials + direct labor = ?
Prime costs
In ABC costing, what is a factor that causes overhead cost.
Cost driver
Break-even point in units formula?
Fixed Costs / CM per unit
Managerial accounting is only for external users.
False