6. Consider the following costs: 1. Rent on equipment used in the factory. II. Salary of production Supervisor. I a. Cost I is a period cost: Cost II is a period cost. b. Cost I is a period cost; Cost II is a product cost. c. Cost I is a product cost: Cost Il is a period cost. d. Cost I is a product cost: Cost Il is a product cost. 7. Consider the following statements: 1. If the activity level increases, then one would expect the fixed cost per unit To increase as well. II. Conversion costs equal product costs less Manufacturing Overhead cost. a. I is true; II is true Not a quiz question b. lis true: II is false c. I is false; Il is true d. I is false; Il is false 8. Which of the following would most likely NOT be included as manufacturing overhead in a furniture Factory? a. The cost of the glue in a chair. b. The amount paid to the individual who glues the chair. c. The electricity used in cutting materials. d. All would be included in manufacturing overhead. e. None of the above 9. Company A has a total contribution margin of $75,000 and Fixed Expenses of $55,000 for an income of $20,000 Company B has a total contribution margin of $25,000 and Fixed Expenses of $5,000 for an income of $20,000. 1. Which has a larger Degree of Operating Leverage? II. If both companies increase sales by $100, which company will have the higher amount of income? a. Company A has the larger Degree of Operating Leverage: Company A will have the higher income. b. Company A has the larger Degree of Operating Leverage: Company B will have the higher income. c. Company B has the larger Degree of Operating Leverage; Company A will have the higher income. d. Company B has the larger Degree of Operating Leverage: Company B will have the higher income. 10. A company believes that if it spends $25,000 on an advertising campaign for one of its segments, there will be a 20% increment in the segment's sales. The contribution margin for the segment is 60% of sales. Sales for the segment are expected to be $400,000 before the advertising campaign. The relationship of costs to sales is expected to remain the same. The incremental net operating income if the advertising campaign is undertaken is expected to be: a. $23,000 c. $ 9,000 b. $18,000 d. $ 9,000 loss e. None of the above. The answer is