True or false:

_____1. An activity index identifies activity that is causally related to a particular cost.

_____2. A fixed cost remains constant in total and per unit at various levels of activity.

_____3. Changes in activity level will cause variable costs per unit and fixed costs per unit to shift in opposite directions.

_____4. The difference between the costs at the high and low activity levels represents the fixed cost element of a mixed cost.

_____5. The trend in most companies is to have more variable costs and fewer fixed costs.

_____6. The 40% contribution margin ratio means that $ .60 of every sales dollar is available to cover fixed costs and produce profit.

______7. A cost-volume-profit graph shows the amount of net income or loss at each level of sales.

______8. If the variable costs per unit are 70% of sales, the fixed costs are $ 290,000 and the target net income is $ 70,000, the required sales are $ 1,200,000.

______9. When making decisions, management typically considers both financial and non-financial information

. _____10. In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant.

___11. Decision-making involves choosing between alternative courses of action.

___12. In incremental analysis, total fixed costs will always remain constant under alternative courses of action

_____13. If a company has excess capacity and current markets will not be affected, it would be profitable to accept an order at a special unit price, even if the price is less than the unit variable cost to manufacture the item.

____14. A company should never accept an order for its product at a price lower than the usual selling price.

____ 15. If a business is operating at less than capacity, the incremental costs for a special order will likely include variable manufacturing costs, but not fixed costs.