1.Which of the following describes full costs for a product for profitabilityanalysis?

A.

Full product costs consist of directmaterials, direct labour and manufacturing overhead.

B.

Full product costs do not include nonmanufacturing costs.

C.

Full product costs are narrower in scope than inventoriable product costs.

D.

Full product costs include all costs of the value chain.

2.When the number of units produced is less than the number of unitssold, how does operating income under variable costing differ from operating income under absorptioncosting?

A.

It is higher than operating income under absorption costing.

B.

It depends upon the amount of decline.

C.

It is the same as operating income under absorption costing.

D.

It is lower than operating income under absorption costing.

3.Which of the following describes the way in which variable costs per unitbehave?

A.

They will increase as production decreases.

B.

They will remain the same as production levels change.

C.

They will decrease as production decreases.

D.

They will decrease as production increases.

4.How would Honda classify its partially completedvehicles?

A.

Supplies

B.

Work in process

C.

Finished goods

D.

Raw materials

5.Which of the following is the most significant cost for a servicecompany?

A.

Supplies

B.

labour

C.

Manufacturing overhead

D.

Indirect costs

6.Preparing budgets is an example of the management function of

A.

controlling.

B.

decisionmaking.

C.

directing.

D.

planning.