1. Because labor hours are related closely to the volume of activity in the factory, these traditional product-costing systems often are said to be volume-based costing systems. TRUE/FALSE

2. In the first stage of ABC, a cost driver is selected for each activity cost pool. TRUE/FALSE

3. When using ABC, overhead costs assigned to each activity comprise an activity cost pool. TRUE/FALSE

4. In an activity-based costing system, direct materials used would typically be classified as a unit-level cost. TRUE/FLASE

5. Engineering design costs are typically known as batch-level activities. TRUE/FALSE

6. A products cost is the sum of its direct-material cost, its direct-labor cost, and its overhead cost, which is the accumulation of all the resource costs driven to the product by the various cost drivers selected for the ABC system. TRUE/FALSE

7. Activity-based costing systems have a tendency to distort product costs. TRUE/FALSE

8. Variable costs change in direct proportion to a change in the activity level. TRUE/FALSE

9. Cost that are nearly variable, but increase in small steps instead of continuously are called step-variable costs. TRUE/FALSE

10. If the organization operates at an activity level outside the relevant range, any cost predictions based on data from the relevant range may not be very accurate. TRUE/FALSE