4. Purchase order processing is an example of a: A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity. (5%) 5. When would the direct method and the step-down method of service department cost allocation result in identical allocations being made to the operating departments? A. when there is only one service department B. when all of the costs in the service departments are fixed costs C. when there is an equal amount of service departments and operating departments D. both A and B above (5%) 6. Which of the following statements is true? A. When production exceeds sales, a manufacturing company's variable costing net operating income will usually be greater than its absorption costing net operating income. B. The variable costing method is usually not used for external reporting purposes. C. The absorption costing method treats fixed production costs as period costs. D. All of these. (5%)