15. Which of the following statements is true? a) A direct cost of one cost object is always the direct cost of another cost object b] All xed costs are indirect costs c) Cost-benet tradeoffs may lead to treat some direct costs as indirect costs d} All direct costs are variable costs 16. Suppose a company does not have xed costs. Which of the following statements is true? a) The degree of operating leverage must be equal to 1 b) The sales price must equal the variable cost per unit c) The contribution margin must exceed operating income d} Operating income must be negative 1'7. Suppose that ms: Co. has the capacity to produce 65,000 units of product annually. Currently, the company produces 30,000 units of product and will increase production to 45,000 next year. What is the most likely behavior of total costs and unit costs, given this change? a) Total costs will increase, and unit costs will slay the same b) Total costs will stay the same and unit costs will stay the same c) Total costs will increase, and unit costs will also increase d} Total costs will increase, and unit costs will decrease 10. To determine the cost of ending inventory for nancial reporting purposes at a manufacturing company, the following formula should he used: a) Ending inventory = Beginning inventory Cost of goods manufactured b) Ending inventory = Beginning inventory + Cost of goods manufactured Cost of goods sold c) Ending inventory = Beginning inventory Cost of goods manufactured + COGS d} Ending inventory = Cost of goods manufactured - Beginning inventory - COGS 19. Suppose that Arthur, Ltd. produces only two products: X and Y. If the new costing system used by the company reveals that product X was Why its previous costing system, then managers at Arthur, Ltd. can conclude that: a] The previous system traced too many direct costs to products X and Y b) The new costing system is an improvement over the previous costing system c) Product Ywas Why the previous costing system d} Product Xwas Why the previous costing system 20. In 2021, Marcel, Inc. produced two products: marhle tahles and marhle bookshelves, with a retail price of $1,700 and $2,300, respectively. Managers had estimated the cost of marble tables to be 700 when using a single cost allocation base (machine hours) to allocate indirect costs to products. However, managers were convinced that three cost drivers should he used and adopted an ABC system. After adoption, indirect costs were allocated to tahles and hookshelves based on: equipment usage, storage area, and type of marble. The ABC estimate of the cost of marble tables was determined to he 530 per set Given this change in the cost structure... a) Marble cables are now more accurately costed than marble bookshelves b) The accuracy of cost estimates depends on the adequacy of the cost drivers c) Both the total costs of the company and the unit manufacturing costs will go down d} Compared to the previous qstem, the ABC system Wmarble bookshelves and over- costs marble tables