Section A: Multiple Choice Questions (Please circle the most appropriate answer) (3 marks) 1) Cost behavior refers to a) how costs react to a change in the level of activity. whether a cost is incurred in a manufacturing, merchandising, or service company. c) classifying costs as either inventoriable or period costs d) whether a particular expense has been ethically incurred 2) Cost-volume-profit analysis assumes all EXCEPT a) all costs are variable or fixed units manufactured equal units sold total variable costs remain the same over the relevant range. d) total fixed costs remain the same over the relevant range. 3) Cost accounting measures the costs of acquiring or using resources in an organization measures the financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization c. coordinates product design, production, and marketing decisions and evaluate a company's performance d. communicates information to investors, banks, regulators, and other outside parties 4) Management accounting O focuses on estimating future revenues, costs, and other measures to forecast activities and their results b. provides information about the company as a whole c. reports information that has occurred in the past that is verifiable and reliable d. provides information that is generally available only on a quarterly or annual basis 5) A cost function is a a. process of calculating present value of projected cash flows b. process of allocating costs to cost centers or cost objects C. mathematical description of how a cost changes with changes in the level of an activity relating to that cost is a very thorough and detailed way to identifying a cost object when there is a physical relationship between inputs and outputs d. 6) Classifying a cost as either direct or indirect depends upon a. the behavior of the cost in response to volume changes. b. whether the cost is expensed in the period in which it is incurred C. whether the cost can be easily identified with the cost object d. whether an expenditure is avoidable or not in the future