1

A sunk cost is one that is:

(a)

Made when excavating for a new swimming pool

(b)

Not relevant to the present decision

(c)

Controllable in the future

(d)

The same as an opportunity cost

4

How does Activity-Based costing provide an accurate allocation of costs to products?

(a)

Activity-Based costing is used for reporting purposes

(b)

Activity-Based costing only assigns labor and material costs to products

(c)

Activity-Based costing only assigns non-manufacturing costs to products

(d)

Activity-Based costing takes into account all costs, even non-manufacturing ones

5	The best allocation method to be used in Activity-Based costing is:
	(a)	Labour because it is easily measured and predictable
	(b)	Machine hours because more operations are becoming automated
	(c)	Different activities for different overhead costs
	(d)	Any method because they are all equally accurate

6	A contribution income statement differs from a regular income statement by:
	(a)	The allocation of variable costs
	(b)	The measurement of revenue
	(c)	The exclusion of depreciation
	(d)	Ignoreing the affect of income tax