4. Costs incurred in detecting poor quality goods or services are what type of costs? A) Appraisal costs B) Prevention costs C) External failure costs D) Internal failure costs 5. The cost of inspection at various stages of production is an example of a(n) A) internal failure cost. B) prevention cost. C) appraisal cost. D) external failure cost. 6. Regarding activity-based costing systems, which of the following statements is true? A) ABC costing systems have separate indirect cost allocation rates for each activity. B) ABC costing systems can be used in manufacturing firms only. C) ABC systems accumulate overhead costs by departments. D) ABC costing systems are less complex and, therefore, less costly than traditional systems. 7. To find the breakeven point using the shortcut formulas, you use A) zero for the operating income. B) zero for the contribution margin ratio. C) zero for the contribution margin per unit. D) zero for the fixed expenses. 8. A company's margin of safety is computed as A) expected sales - sales at breakeven. B) expected sales - actual sales. C) sales at breakeven - expected sales. D) actual sales - expected sales 9. Richard's Framing Company provides the following information about its single product. Targeted operating income $60,000 Selling price per unit $175.00 Variable cost per unit $45.00 Total fixed cost $273,000 What is the contribution margin per unit? A) $220 B) $0.74 C) $45 D) $130