1 a)

Variable cost per unit

	a.	does not change when the number of units produced increases.
	b.	increases when the number of units produced increases.
	c.	decreases when the number of units produced decreases.
	d.	decreases when the number of units produced increases.

b)

The choice of an allocation base is based on:

	a.	how long it takes to manufacture one unit
	b.	whether or not the manufacturing has been outsourced
	c.	whether the manufacturing is labor intensive or machine intensive
	d.	none of the above

c)

Why is overhead applied using a predetermined overhead rate?

	a.	It helps to reduce the overhead cost for the company.
	b.	The actual amount of overhead is not determined until yearend and the company desires timely cost information
	c.	Actual manufacturing overhead costs are often larger than expected.
	d.	It allows a company to overcost and undercost specific jobs as desired.