1. What has the increased use of automation and less use of the work force in companies caused a trend towards an increase in?

both variable and fixed costs

fixed costs and a decrease in variable costs

variable costs and a decrease in fixed costs

variable costs and no change in fixed costs

2. To which function of management is CVP analysis most applicable?

Planning

Motivating

Directing

Controlling

3. What is an example of a mixed cost?

direct materials.

supervisory salaries.

utility costs.

property taxes.

4. What does a mixed cost contain?

a variable element and a fixed element

both selling and administrative costs

both retailing and manufacturing costs

both operating and nonoperating costs

5. If ABC Airlines cuts its domestic fares by 30%,

its fixed costs will decrease.

profit will increase by 30%.

a profit can only be earned by decreasing the number of flights and reducing the number of airline employees.

a profit can be earned by increasing the number of passengers or by decreasing variable costs.