Answer the Following Questions Using the Information Below:
Warne's Flipper

Answer the following questions using the information below:
Warne's Flipper Company sells several products.Information of average revenue and costs is as follows:
$\begin{array}{lr}\text { Selling price per unit } & \$ 25.00 \\\text { Variable costs per unit: } & \\\text { Direct material } & \$ 5.00 \\\text { Direct manufacturing labour } & \$ 1.80 \\\text { Manufacturing overhead } & \$ 0.80 \\\text { Selling costs } & \$ 2.00 \\\text { Annual fixed costs } & \$ 96000\end{array}$
-All of the following are assumed in the above analysis EXCEPT:

A) fixed costs increase when activity increases.
B) a constant product mix.
C) all costs can be classified as either fixed or variable.
D) cost and revenue relationships are reflected accurately.

Correct Answer:

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