1. Over the range of the number of units produced, costs can be classified as variable costs and fixed costs by its behavior.

1. True
2. False

2. Direct materials and direct labor are variable costs for a manufacturing company.

1. True
2. False

3. Sales commission, a certain percentage of sales contract, is an example of variable cost.

1. True
2. False

4. Property taxes a company pays on their manufacturing plant and on their office building are fixed costs.

1. True
2. False