, ENGV 380 Quiz 2 – Costs and Engineering Estimates | Complete
Questions & Answers | 30/30 | Liberty University 2026 | | just
released .
Section 1: Fundamentals of Engineering Costs (Questions 1–25)
Question 1: What are the four types of engineering costs?
A. Direct, Indirect, Overhead, and Profit
B. Fixed, Variable, Marginal, and Average
C. Material, Labor, Equipment, and Subcontract
D. Recurring, Non-recurring, Incremental, and Sunk
CorreCt Answer: B. Fixed, Variable, Marginal, and Average.
rAtionAle: The four types of engineering costs are Fixed costs (remain constant as output
changes), Variable costs (vary with the quantity of output produced), Marginal costs (cost of
producing one more unit), and Average costs (total costs divided by the number of units).
Question 2: What is a fixed cost?
A. A cost that varies with the level of output
B. A cost that remains constant as output changes
C. A cost that only occurs once
D. A cost that is always paid in cash
CorreCt Answer: B. A cost that remains constant as output changes.
rAtionAle: Fixed costs remain constant regardless of production volume or activity level.
Examples include rent, insurance, and salaried employees.
Question 3: What is a variable cost?
A. A cost that remains constant regardless of output
B. A cost that varies with the quantity of output produced
C. A cost that is always avoidable
D. A cost that is never incurred
CorreCt Answer: B. A cost that varies with the quantity of output produced.
rAtionAle: Variable costs change in proportion to the level of output or activity. Examples
include materials, hourly labor, and utilities.
, Question 4: What is marginal cost?
A. The total cost of production
B. The average cost of all units produced
C. The cost of producing one more unit of a good
D. The fixed cost per unit
CorreCt Answer: C. The cost of producing one more unit of a good.
rAtionAle: Marginal cost is the additional cost incurred to produce one more unit of output. It
is important for optimizing production levels.
Question 5: What is average cost?
A. Total costs divided by the number of units
B. The cost of the first unit produced
C. The cost of the last unit produced
D. The fixed cost only
CorreCt Answer: A. Total costs divided by the number of units.
rAtionAle: Average cost is calculated as total cost divided by the number of units produced. It
represents the per-unit cost of production.
Question 6: What is an opportunity cost?
A. The cost of materials
B. The benefit that is forgone by engaging a resource in a chosen activity instead of an
alternative
C. The cost of labor
D. The cost of equipment
CorreCt Answer: B. The benefit that is forgone by engaging a resource in a chosen activity
instead of an alternative.
rAtionAle: Opportunity cost is the benefit that is forgone by engaging a business resource in
a chosen activity instead of engaging that same resource in a forgone activity. It is also called
forgone opportunity cost.
Question 7: What is a sunk cost?
A. A cost that will be incurred in the future
B. Money already spent due to a past decision
C. A cost that varies with output
D. A cost that is always avoidable
CorreCt Answer: B. Money already spent due to a past decision.
Questions & Answers | 30/30 | Liberty University 2026 | | just
released .
Section 1: Fundamentals of Engineering Costs (Questions 1–25)
Question 1: What are the four types of engineering costs?
A. Direct, Indirect, Overhead, and Profit
B. Fixed, Variable, Marginal, and Average
C. Material, Labor, Equipment, and Subcontract
D. Recurring, Non-recurring, Incremental, and Sunk
CorreCt Answer: B. Fixed, Variable, Marginal, and Average.
rAtionAle: The four types of engineering costs are Fixed costs (remain constant as output
changes), Variable costs (vary with the quantity of output produced), Marginal costs (cost of
producing one more unit), and Average costs (total costs divided by the number of units).
Question 2: What is a fixed cost?
A. A cost that varies with the level of output
B. A cost that remains constant as output changes
C. A cost that only occurs once
D. A cost that is always paid in cash
CorreCt Answer: B. A cost that remains constant as output changes.
rAtionAle: Fixed costs remain constant regardless of production volume or activity level.
Examples include rent, insurance, and salaried employees.
Question 3: What is a variable cost?
A. A cost that remains constant regardless of output
B. A cost that varies with the quantity of output produced
C. A cost that is always avoidable
D. A cost that is never incurred
CorreCt Answer: B. A cost that varies with the quantity of output produced.
rAtionAle: Variable costs change in proportion to the level of output or activity. Examples
include materials, hourly labor, and utilities.
, Question 4: What is marginal cost?
A. The total cost of production
B. The average cost of all units produced
C. The cost of producing one more unit of a good
D. The fixed cost per unit
CorreCt Answer: C. The cost of producing one more unit of a good.
rAtionAle: Marginal cost is the additional cost incurred to produce one more unit of output. It
is important for optimizing production levels.
Question 5: What is average cost?
A. Total costs divided by the number of units
B. The cost of the first unit produced
C. The cost of the last unit produced
D. The fixed cost only
CorreCt Answer: A. Total costs divided by the number of units.
rAtionAle: Average cost is calculated as total cost divided by the number of units produced. It
represents the per-unit cost of production.
Question 6: What is an opportunity cost?
A. The cost of materials
B. The benefit that is forgone by engaging a resource in a chosen activity instead of an
alternative
C. The cost of labor
D. The cost of equipment
CorreCt Answer: B. The benefit that is forgone by engaging a resource in a chosen activity
instead of an alternative.
rAtionAle: Opportunity cost is the benefit that is forgone by engaging a business resource in
a chosen activity instead of engaging that same resource in a forgone activity. It is also called
forgone opportunity cost.
Question 7: What is a sunk cost?
A. A cost that will be incurred in the future
B. Money already spent due to a past decision
C. A cost that varies with output
D. A cost that is always avoidable
CorreCt Answer: B. Money already spent due to a past decision.
