1. True False (15 points) 1 2 3 4 5 6 7 8 9 10 1. The range over which a company expects to operate during a year is called the relevant range of the activity index. 2. The contribution margin ration is computed by dividing contribution margin by unit selling price. 3. Target net income is an income objective for individual product lines set by management. 4. Opportunity cost is a cost that cannot be changed by any present or future decision. 5. When a company has limited resources, management must decide which products to make and sell in order to maximize sales. 6. Under variable costing, the fixed manufacturing overhead is charged as an expense in the current period 7. Net income computed under variable costing is unaffected by changes in production levels. 8. Mixed costs change proportionately with changes in the activity level. 9. The contribution margin ration is computed by dividing contribution margin by unit selling price. 10. Target net income is an income objective for individual product lines set by management. 11. A flexible budget projects budget data for one level of activity. 12. Controllable margin is the excess of contribution margin over total fixed costs. 13. Budgeting facilitates the coordination of activities within the business by correlating the goals of each segment with overall company objectives. 14. The master budget is a set of interrelated budgets that constitutes a plan of action for a specified time period. 15. The budgeted income statement is the starting point in preparing financial budgets