1. Which of the following is a more descriptive term of the type of cost accounting often called "direct costing"? a. Prime costing b. Out-of-pocket costing c. Variable costing d. Relevant costing 2. What costs are treated as product costs under direct costing? a. Only direct costs b. Only variable manufacturing costs C. All variable costs d. All variable and fixed manufacturing costs 3. The basic assumption made in a variable costing system with respect to fixed costs is that all fixed costs are: a. Sunk costs. b. Product costs. c. Fixed as to the total cost. d. Period costs. 4. Fortran Industries produces burner elements for stoves. Each element sells for $20, and the company sells approximately 2,000,000 gears each year. Unit cost data for the year follows: Direct material Direct labor $4.00 3.00 Fixed Other costs: Manufacturing Distribution Variable $2.50 1.50 The unit cost of gears for variable costing inventory purposes is: a $14.50 b. $11.00 c. $9.50 d. 57.00 5. Mobile, Inc., manufactured 700 units of Product A, a new product, during the year. Product AS variable and fixed manufacturing costs per unit were $5.00 and $2.00, respectively. The inventory of Product A on December 31 of the year consisted of 100 units. There was no inventory of Product on January 1 of the year. What would be the change in the dollar amount of inventory on December 31 if the variable conting method was used instead of the shorption costing method $800 decrease b. 5200 decrease c. 5500 decrease d. 5200 increase