1. Contribution margin is the amount remaining after: A. Variable expenses have been deducted from sales revenue. B. Fixed expenses have been deducted from sales revenue. C. Fixed expenses have been deducted from variable expenses. D. Cost of goods sold has been deducted from sales revenue. 2. The margin of safety is: A. The excess of budgeted or actual sales over budgeted or actual variable expenses. B. The excess of budgeted or actual sales over budgeted or actual fixed expenses. C. The excess of budgeted or actual sales over the break-even volume of sales. D. The excess of budgeted net operating income over actual net operating income. 3. Which of the following costs should not be included in product costs for internal management reports that are used for decision-making? A. Costs of unit-level activities. B. Costs of batch-level activities. C. Costs of product-level activities. D. Costs of organization-sustaining activities. 4. In order to reduce its overall quality costs, a company should focus most of its efforts on: A. Prevention costs B. Appraisal costs C. Internal failure costs D. External failure costs