1.Choose all of the following statements that are true.

a. Opportunity costs and sunk costs are not reflected on a firm's financial statements.

b. Direct costs are manufacturing costs; indirect costs are non-manufacturing costs.

c. Variable costs are always relevant to a decision.

d. Under absorption costing, when a firm increases production, but has the same amount of sales, cost of goods sold decreases.

e. Job order costing systems are used only in service industries; process costing systems are used only in manufacturing industries.

2.Which of the following are true about cost behaviorwithin a particular relevant range?(Choose all that apply.)

a. Variable costs per unit increase as a company produces more units of production.

b. Total fixed cost is constant over all units of production.

c. Fixed costs per unit decreases as a company produces less units of production.

d. The slope of total variable costs is positive over increasing levels of production.