1A Which of the following items would be classified as a part of prime cost?

a.Factory overhead cost

b.Direct labor cost

c.Selling cost

d.Administrative cost

1B Calculate the number of units that must be sold in order to realize an operating income of $139,000 when fixed costs are $440,000 and unit contribution margin is $20.

a.29,650 units

b.30,350 units

c.31,550 units

d.28,950 units

1C Currently, fixed costs are $561,000 and the unit contribution margin is $10. What would be the break-even point in units if variable cost is decreased by $0.50 per unit?

a.59,053 units

b.53,429 units

c.56,100 units

d.60,000 units

1D Cost behavior refers to the manner in which:

a.a cost changes as the related activity changes.

b.a cost is allocated to products.

c.a cost is used in setting selling prices.

d.a cost is estimated.