True or False?

1. Activity-based costing first assigns costs to products and then uses these product costs to assign costs to manufacturing activities.

2. To calculate the break-even point in units, one must know unit fixed cost, unit variable cost, and unit sales price.

3. When units produced exceed the units sold, income under absorption costing is higher than income under variable costing.

4. When the actual cost of direct materials used exceeds the standard cost, the company must have experienced an unfavorable direct materials price variance.

5. When a company has no excess capacity, the use of cost-based transfer pricing is preferred.

6. Responsibility performance reports usually compare actual costs to the budgeted costs amounts.

7. Return on investment for a given investment center can be split into two components: profit margin and investment turnover.

8. Employee morale, timeliness of delivery, and the reactions of customers are examples of nonfinancial factors that should be considered when making a managerial decision.

9. All capital investment evaluation methods use the time value of money concept.

10. Lower-risk investments require a higher rate of return compared with higher-risk investments.