NOTE: For multiple-choice and true/false questions, simply place your cursor over what you think is the correct answer. (There is no need to click the answer.) For fill-in-the-blank questions place your cursor over the _________.

If you have difficulty answering the following questions, learn more about this topic by reading our Improving Profits Explanation.

We also have Crosswords and Q&A for this topic.

1.	Fixed expenses are best described as expenses that remain the same
in total even when volume triples              in total within a reasonable change in volume              on a per unit basis as volume changes

2.	Variable expenses are best described as expenses that change
in total as volume changes              on a per unit basis as volume changes

3.	Expenses that will be the same amount under two alternative proposals are not relevant when selecting one of the proposals. In other words, the expenses that are the same could be omitted from both alternatives without affecting the decision.	True	False
4.	A general rule for profit maximization in the short run is: if the additional revenues exceed the additional expenses...do it.	True	False
5.	The most relevant amounts for making a decision are found in the general ledger.	True	False
6.	If a company's sales were to triple, some fixed expenses are likely to increase.	True	False
7.	A sole proprietor's compensation will be included in Salaries Expense.	True	False
8.	The original cost of an asset presently in use is generally not relevant in the decision to replace the asset.	True	False
9.	A significant amount of money to be received from the sale of equipment being replaced is relevant in the decision to replace the equipment.	True	False
10.	A variable expense means that the per unit amount will vary with sales.	True	False

11.	Which costs are the most relevant in deciding between two alternatives?
Future costs that differ              Future costs that do not differ              Historical costs

12.	Past, historical costs are also known as ________ costs.

13.	Expenses that are part fixed and part variable are known as __________ costs.

14.	The statistical tool used to determine the fixed and variable portions of a mixed expense is ____________ analysis.

15.	The salary of the vice-president of human resources is likely to be classified into which cost behavior?
Fixed              Mixed              Variable

16.	The office rent is likely to be classified into which cost behavior?
Fixed              Mixed              Variable

17.	Commissions Expense is likely to be classified into which cost behavior?
Fixed              Mixed              Variable

18.	The expense of operating the shipping department is likely to follow which cost behavior?
Fixed              Mixed              Variable

19.	The property tax on the administrative office building is likely to follow which cost behavior?
Fixed              Mixed              Variable

20.	A retailer's cost of goods sold is likely to behave as which type of cost?
Fixed              Mixed              Variable