Which of the following statements is true about direct costs?

	a.	A direct cost is a cost that can easily and conveniently be traced to a specified cost object.
	b.	A direct cost is allocated to different cost objects.
	c.	A direct cost is a cost that cannot be easily traced to a specified cost object.
	d.	Manufacturing overhead is included as a direct cost.

QUESTION 4

1. Doors, Inc. produced 25,000 units last year. The following information was provided:

   Direct materials = $50/unit

   Direct labor = $15/unit

   Variable manufacturing overhead = $5/unit

   Fixed manufacturing overhead = $250,000

   Fixed selling and administrative costs = $10/unit

   Given the above information, calculate the unit product cost under variable costing (VC) and absorption costing (AC).

   	a.	None of the given answers are correct.
   	b.	VC = $65; AC = $70
   	c.	VC = $80; AC = $70
   	d.	VC = $70; AC = $80
   	e.	VC = $70; AC = $90

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QUESTION 7

1. If a company has $600,000 in total sales, what will its contribution margin ratio be if the company has $200,000 in total variable expenses?

   	a.	33%
   	b.	25%
   	c.	75%
   	d.	67%

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QUESTION 8

1. Incremental costs:

   	a.	are always equal to the incremental revenues.
   	b.	are incurred regardless of the decision being made.
   	c.	are the additional costs associated with one of the alternatives.
   	d.	should always be avoided.