Page 231 - BA2 Integrated Workbook - Student 2017

Supplementary objective test questions

2.3 Which one of the following descriptions is consistent with the diagram
shown?

$
Total
cost

0 Volume of
activity

A Annual total cost of factory power where the supplier sets a tariff based on a
fixed charge plus a constant unit cost for consumption which is subject to a
maximum annual charge

B Total annual direct material cost where the supplier charges a constant
amount per unit which then reduces to a lower amount per unit after a
certain level of purchases

C Total annual direct material cost where the supplier charges a constant
amount per unit but when purchases exceed a certain level a lower amount
per unit applies to all purchases in the year

D Annual total cost of telephone services where the supplier makes a fixed
charge and then a constant unit rate for calls up to a certain level. This rate
then reduces for all calls above this level

223