1.If there is a change in the level of the number of units produced: a.fixed costs per unit will be the same and variable costs per unit will change. b.fixed and variable costs per unit will change. c.fixed and variable costs per unit will remain the same. d.fixed costs per unit will change and variable costs per unit will be the same.

2.Which of the following will decrease a companys breakeven point? A) Decreasing the contribution margin per unit. B) Increasing the variable cost per unit. C) Increasing the total fixed costs. D) Increasing the selling price per unit.

	3.In generating cost information for determining whether or not to delete a product line, the most important distinction to identify is:
	A)	direct versus indirect costs
	B)	fixed versus variable costs
	C)	manufacturing versus non-manufacturing costs
	D)	avoidable versus unavoidable costs

4.Which of the following is the proper sequence in an activity-based costing system? A) Identification of cost drivers, identification of cost pools, calculation of cost application rates, assignment of cost to products. B) Identification of cost pools, identification of cost drivers, calculation of cost application rates, assignment of cost to products. C) Assignment of cost to products, identification of cost pools, identification of cost drivers, calculation of cost application rates,. D) Calculation of cost application rates, identification of cost drivers, identification of cost pools, assignment of cost to products.

5.Which of the following statements is true? A) A traditional volume-based system based on direct labor generally undercosts high volume product lines. B) In a traditional volume-based costing system based on direct labor, low volume products generally subsidize high volume products. C) An activity-based costing system generally undercosts low-volume, complex product lines. D) A traditional volume-based costing system based on direct labor generally undercosts low-volume, complex product lines.

6.Hamilton Company applies overhead based on direct labor hours. At the beginning of 2005, the company estimated that manufacturing overhead would be $700,000, and direct labor hours would be 10,000. Actual overhead by the conclusion of 2005 amounted to $800,000 and actual direct labor hours were 14,000. On the basis of this information, Horton's 2005 predetermined overhead rate is: A) $50.00 B) $70.00 C) $80.00 D) $57.14