1. Give an example of why the statement, all direct cost are avoidable, is incorrect.

2. What are the important factors in determining the appropriate cost driver to use in allocating a cost? What type of cost drivers does the company for which you work use ( convenience store clerk)?

3. On January 31, the managers of Integra, Inc., seek to determine the cost of producing their product during January for product pricing and control purposes. The company can easily determine the cost of direct materials and direct labor used in January production, but many fixed indirect costs are not affected by the level of production activity have not yet been incurred. The managers can reasonably estimate the overhead cost for the year based on the fixed indirect costs incurred in past periods. Assume the managers decide to allocate an equal amount of these estimated cost to the products produced each month. explain why this practice might not provide a reasonable estimate of product cost in January