1. When the variable cost per unit decreases, the contribution margin on each unit sold also decreases.

A) True

B) False

2. Which of the following statements is true?

A) Indirect costs must be allocated based on a single plant wide rate.

B) Manufacturing overhead costs are accumulated in cost pools and then assigned to products.

C) Managers cannot wait until the end of the accounting period for product cost information.

D) Managers can choose to wait until the end of the accounting period to allocate manufacturing overhead costs.

3. Which of the following is a nonmanufacturing cost?

A) direct labor

B) direct materials

C) administrative expenses

D) indirect labor

4. Which of the following is a disadvantage of a just-in-time management system?

A) It results in a decrease in production space.

B) It increases the inventory cost.

C) The risk of the inventory becoming obsolete is very high.

D) The users of this system sometimes lose sales because of little or no inventory buffers.

5. Just-in-time costing is also known as ________.

A) job costing

B) batch costing

C) backflush costing

D) process costing

6. The fixed costs per unit will ________.

A) increase as production decreases

B) decrease as production decreases

C) remain the same as production levels change

D) increase as production increases

7. Which of the following statements is true of the behavior of total fixed costs, within the relevant ange?

A) They will remain the same as production levels change.

B) They will increase as production decreases.

C) They will decrease as production decreases.

D) They will decrease as production increases.

8. When the sales price per unit decreases, the breakeven point ________.

A) increases

B) decreases

C) remains the same

D) decreases proportionately