14. Total variable cost changes directly proportionately to the number of units produced. whereas total fixed cost remains unchanged regardless of the number of units produced. a) True b) False 15. Variable costs and fixed costs are incurred at manufacturing plants, and, also, at office buildings. a) True b) False 16. For a manufacturing company, direct materials and direct labor are variable costs, but manufacturing overhead (MOH) is mixed costs. a) True b) False 17. Variable costs per unit of activity have an inverse relationship with the change in volume of activity. a) True b) False 18. The following format of income statement is not accepted as GAAP. Sales Revenue Variable Costs Contribution Margin Fixed Costs Net Income a) True b) False