Quiz 1

1. Fixed or Variable? Raw Materials

Ans: Variable

2. Fixed or Variable Cost? Payroll Taxes

Answer: Both(Fixed and Variable Cost)

3. Fixed or Variable Cost? Interest Cost on Borrowed Capital

Answer: Fixed

4. Fixed or Variable Cost? Administrative Salaries

Answer: Fixed

5. Fixed or Variable Cost? Direct Labor

Answer: Variable

6. Fixed or Variable Cost? Property Taxes

Answer: Fixed

7. A Perfect monopoly -- exists when a unique product or service is only available from a single
supplier and that vendor can prevent the entry of all others into the market.

8. Fixed cost- Are those unaffected by changes in activity level over a feasible range of operations
for the capacity or capability available.

9. Fixed or Variable Cost? Clerical Salaries

Answer: Fixed

10. Indirect cost -- are costs that are difficult to allocate to a specific output or work activity.

11. Fixed or Variable Cost? Insurance-Building and Equipment

Answer: Fixed

12. Fixed or Variable Cost? Rent

Answer: Fixed

13. Sunk cost -- is one that has occurred in the past and has no relevance to estimates of future costs
and revenues related to an alternative course of action.

14. Fixed or Variable Cost? Interest on Borrowed Money

Answer: Fixed

15. Perfect competition -- exist in a situation in which any given product is supplied by a large
number of vendors and there is no restriction on additional suppliers entering the market.

16. Fixed or Variable Cost? Sales Commissions

Answer: Variable

17. Incremental revenue -- is the additional revenue that results from increasing the output of a
system by one (or more) units.

18. Fixed or Variable Cost? Supplies

Answer: Variable

19. Fixed or Variable Cost? License Fees

Answer: Fixed
20. Fixed or Variable Cost? Utilities
Answer: Both (Variable and Fixed)

Quiz 2