Which of the following is TRUE of a firm that uses Absorption costing?

1. Fixed manufacturing overhead and fixed selling costs are considered to be product costs.

2.net income fluctuates directly and proportionally with changes in sales volume

3. unit product costs can change as a result of changes in the number of units produces

4. variable selling expenses are included in product costs.

Net operating income computed under variable costing would exceed net operating income computed absorption costing if:

1. units sold exceed units produced.

2. units sold less than units produced

3. units sold equals units produced

4. the average fixed cost per unit is zero.

Parts administration is an example of:

1. unit level activity

2. batch level activity

3. product level activity

4. organization sustaining

Which of the following costs are always irrelevant in decision making:

1.avoidable costs

2. fixed costs

3. opportunity costs

4. sunk costs