MENU
If the volume is greater than the cost equalization point, the method with the greater variable cost will cost less.
Suggested Answer: B
Get Premium CPIM Questions
as Interactive Web-Based Practice Test or PDF
Real Exam Format
Detailed Explanations
Instant Access
Get Your Practice Test
30 comments · newest first
SH
Sharika
10 months ago
Totally agree, variable costs can be tricky.
CO
Colette
10 months ago
I disagree, it seems counterintuitive.
BR
Brandee
10 months ago
True, that's how cost structures work.
DO
Donte
10 months ago
False, I think the fixed costs play a bigger role.
ME
Merilyn
10 months ago
Wait, really? That sounds off.
JO
Johnathon
11 months ago
I recall that at higher volumes, fixed costs spread out, but I can't remember if that makes the higher variable cost method cheaper.
JI
Jina
11 months ago
I’m a bit confused. If the volume is high, wouldn’t the method with the lower variable cost be more beneficial?
JO
Johanna
11 months ago
This seems similar to a practice question we did on variable costs and break-even analysis. I might lean towards "False."
LA
Launa
11 months ago
I think I remember something about cost equalization points, but I'm not sure how it applies here.
EL
Ellsworth
12 months ago
I feel pretty confident about this. The key is understanding that the cost equalization point is the volume where the two methods have the same total cost. Above that point, the higher variable cost method is cheaper. Let's do this!
VI
Vincenza
12 months ago
Wait, I'm confused. Wouldn't the method with the lower variable cost be the cheaper one, regardless of the volume? I'm not sure about this one.
NA
Nadine
12 months ago
Okay, I think I've got this. If the volume is greater than the cost equalization point, the method with the higher variable cost will actually cost less. Makes sense!
DA
Darrin
1 year ago
I'm not sure I fully understand the question. Can someone explain the concept of a "cost equalization point" to me?
EL
Ellsworth
1 year ago
Hmm, this one seems a bit tricky. I'll need to think through the logic carefully.
DE
Denny
1 year ago
Hold up, is this a trick question? I'm going to overthink this way too much, aren't I?
JO
Josefa
1 year ago
B) False
GR
Gregg
1 year ago
Don't overthink it, just go with your gut.
GL
Glenna
1 year ago
A) True
CA
Carmen
1 year ago
But if the volume is greater than the cost equalization point, the method with the greater variable cost will cost less, so it should be True.
LU
Ludivina
1 year ago
I disagree, I believe the answer is B) False.
MI
Milly
1 year ago
This question is giving me a headache. Can we just skip it and move on to the easier ones? I need a coffee break.
TH
Thomasena
1 year ago
Let's take a quick coffee break and then tackle this question together.
AR
Ardella
1 year ago
I'm feeling the same way, let's take a break and come back to it refreshed.
PA
Paris
1 year ago
I agree, let's move on to the easier questions first.
CH
Chi
1 year ago
Sure, let's skip it and come back to it later. Coffee break sounds good!
CA
Carmen
1 year ago
I think the answer is A) True.
MI
Mickie
1 year ago
Hmm, I don't know about this one. Seems a bit counterintuitive, but I'll go with True just to be different.
SH
Shakira
1 year ago
User 2: I'll go with False then.
LO
Lorrine
1 year ago
User 1: I think it's True.
JA
Janine
1 year ago
I'm pretty sure the answer is False. The cost equalization point is where the fixed and variable costs are equal, so above that point the method with the lower variable cost will be cheaper.