True/False

1.The direct method of allocating support department costs is conceptually the most precise method because it considers the mutual services provided among all support departments.

2. The step-down method allocates support department costs to only operating departments in a sequential manner.

3.Joint costs are incurred beyond the splitoff point and are assignable to individual products.

4.The best method of joint cost allocation is the physical units method because it recognizes the relative value of each product produced.

5.One disadvantage of using a single service department charging rate is that user department managers could make poor outsourcing decisions.

6.You cannot use the CVP model when incorporating taxes.

7.You need to know the sales mix for multiple products when computing breakeven analysis.

8.Increases in sales of low contribution margin products reduces the breakeven point.

9.Operating leverage refers to the use of fixed costs to increase percentage changes in operating income when sales volume changes.

10.You would never reduce the selling price of your product below full cost.