University of Mindanao - Main Campus (Matina, Davao City)

ACC 123

TRUE/FALSE
1. The portion of an asset’s value on the balance sheet is referred to as an expired cost.
ANS: F DIF: Easy OBJ: 2-1
2. The portion of an asset that was consumed during a period is referred to an expired cost.
ANS: T DIF: Easy OBJ: 2-1
3. Avariable cost remains constant on a per-unit basis as production increases
ANS: T DIF: Easy OBJ: 2-1
4. A fixed cost remains constant on a per-unit basis as production changes.
ANS: F DIF. Easy OBJ: 2-1
5. The relevant range is valid for all levels of activity
ANS: F DIF: Easy OBJ: 2-1
6. Anindirect cost can be easily traced to a cost object.
ANS: F DIF: Easy OBJ: 2-1
7. Both accountants and economists view variable costs as linear in nature.
ANS: F DIF: Moderate OBJ: 2-1
8. Fixed cost per unit varies directly with production.
ANS: F DIF: Easy OBJ: 2-1
9. Variable cost per unit remains constant within the relevant range.
ANS: T DIF: Easy OBJ: 2-1
10. A cost that shifts upward or downward when activity changes by a certain interval is
referred to as a mixed cost.
ANS: F DIF: Easy OBJ: 2-1
11. A cost that shifts upward or downward when activity changes by a certain interval is
referred to as a step cost.
ANS: T DIF: Easy OBJ: 2-1
12. If the cost of an additive is $5,000 + $0.50 for every unit of solvent produced, the cost is
classified as a mixed cost.