choose the correct answers ( no need to explain)

1. The contribution-margin format of the income statement distinguishes manufacturing costs from non manufacturing costs.

Select one:

True

False

2. John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $11,000 to make it road worthy again. His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $11,000 cash. Sherry estimated the following costs for the two cars:

	Trail Blazer	Grand Cherokee
Acquisition cost	$30,000	$11,000
Repairs	$11,000
Annual operating costs
(Gas, maintenance, insurance)	$2480	$2000

What should John do? What are his savings in the first year?

Select one:

a. Buy the Grand Cherokee; $13,000

b. Fix the Trail Blazer; $5980

c. Buy the Grand Cherokee; $480

d. Fix the Trail Blazer; $9813

3. Which of the following statements is true regarding costing systems?

Select one:

a. Under direct costing variable overhead costs only direct variable costs are considered inventoriable.

b. Under direct costing (also called variable costing) variable non-manufacturing costs are inventoriable.

c. Both absorption costing and variable costing treat all non-manufacturing costs as period costs.

d. Some period costs are "absorbed" into a product's cost under absorption costing.

4. Which of the following statements is true with regards to relevant information?

Select one:

a. When judging alternatives, differences between expected future results are relevant to a decision.

b. Past (historical) costs relevant when making decisions.

c. All expected future revenues and expected future costs are relevant when making decisions.

d. A heavier weight should be given to quantitative nonfinancial factors than to qualitative factors.