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1) Using a predetermined overhead rate reduces large changes in per-unit product costs that could result from production volume variances.

True

False

2) A departmental overhead rate is determined by dividing the estimated overhead associated with the department by the estimated utilization of the productive capacity of that department.

True

False

3) Which of the following is/are assumptions of CVP analysis?

A. Costs behave differently given different levels of production.

B. The sales mix ratio (for multiple products) can change.

C. Sales price will remain the same regardless of the level of sales.

D. All costs are variable in the relevant range.

E. All of the above