MGMT 201 EXAM PURDUE QUESTIONS
AND ANSWERS|| GRADED A+|| LATEST
UPDATE 2026
what is the term for how costs will be affected by changes in activity and who has to
know -CORRECTANSWER cost behavior, manager
What happens when managers don't know cost behavior -CORRECTANSWER bad
budgeting
Cost estimation -CORRECTANSWER process of determining cost behavior and often
focuses on historical data
Cost behavior -CORRECTANSWER relationship between cost and activity, with a focus
on cost functions
Cost Prediction -CORRECTANSWER using knowledge of cost behavior to forecast the
level of cost at a particular activity level, with a focus on thee future
Variable costs -CORRECTANSWER variable costs increase in fixed proportion to an
increase in activity, unit price stays the same
, What is the slope of a variable cost graph -CORRECTANSWER the cost per unit of
activity
Step variable costs -CORRECTANSWER Total cost increases to a new higher cost for
the next higher range of activity, total costs remain constant within a narrow range of
activity
Who is a step variable cost -CORRECTANSWER part time minimum wage workers
who get called when its busy but if it crazy busy you need to call in more help
Fixed cost -CORRECTANSWER price remains the same across the relevant range of
activity (Depreciation, taxes, maintenance personnel)
What does the unit price do for fixed costs -CORRECTANSWER As the activity
increases cost per unit decreases
Step- Fixed Costs -CORRECTANSWER Fixed costs that jump to a different amount
outside a relevant range (like if you need to hire on more salaried personell)
what is the difference between step fized and step variable -CORRECTANSWER Step
variable costs can be adjusted more quickly and the width of the activity steps is much
narrower
AND ANSWERS|| GRADED A+|| LATEST
UPDATE 2026
what is the term for how costs will be affected by changes in activity and who has to
know -CORRECTANSWER cost behavior, manager
What happens when managers don't know cost behavior -CORRECTANSWER bad
budgeting
Cost estimation -CORRECTANSWER process of determining cost behavior and often
focuses on historical data
Cost behavior -CORRECTANSWER relationship between cost and activity, with a focus
on cost functions
Cost Prediction -CORRECTANSWER using knowledge of cost behavior to forecast the
level of cost at a particular activity level, with a focus on thee future
Variable costs -CORRECTANSWER variable costs increase in fixed proportion to an
increase in activity, unit price stays the same
, What is the slope of a variable cost graph -CORRECTANSWER the cost per unit of
activity
Step variable costs -CORRECTANSWER Total cost increases to a new higher cost for
the next higher range of activity, total costs remain constant within a narrow range of
activity
Who is a step variable cost -CORRECTANSWER part time minimum wage workers
who get called when its busy but if it crazy busy you need to call in more help
Fixed cost -CORRECTANSWER price remains the same across the relevant range of
activity (Depreciation, taxes, maintenance personnel)
What does the unit price do for fixed costs -CORRECTANSWER As the activity
increases cost per unit decreases
Step- Fixed Costs -CORRECTANSWER Fixed costs that jump to a different amount
outside a relevant range (like if you need to hire on more salaried personell)
what is the difference between step fized and step variable -CORRECTANSWER Step
variable costs can be adjusted more quickly and the width of the activity steps is much
narrower
