6. In the following CVP graph, where is the break-even point? a or b? 7. Fill the blank of the following equation. CM ratio = Contribution margin For Q8-Q12, Choose the right answer: 8. To assign costs to cost objects, we classify costs into a) direct costs / indirect costs b) direct materials / direct labor c) prime costs / conversion costs 9. Prime cost is a) sum of direct materials and direct labor b) sum of direct materials and selling costs c) sum of direct labor and manufacturing overhead d) sum of manufacturing overhead and administrative costs 10. Conversion cost is a) sum of direct labor and manufacturing overhead b) sum of manufacturing overhead and administrative costs c) sum of direct materials and selling costs d) selling costs and administrative costs 11. For financial accounting purposes, we classify the costs into a) relevant costs and irrelevant costs b) product costs and period costs c) variable costs and fixed costs d) sunk costs and opportunity costs 12. Product costs a) include direct materials, direct labors and selling costs. b) attach to a unit of product as it is manufactured and stay attached to each unit of product unti it is sold. c) are released from inventory as expenses when products are produced. d) are not inventoriable