[9] The efficient level of activity performance is called:

a) activity capacity

b) practical capacity

c) unused capacity

d) acquired capacity

1 Mark

[10] When production is less than sales volume, net income under absorption costing will

be ____ profits using variable costing procedures.

a) greater than

b) less than

c) equal to

d) randomly different from

Which of the following is a by-product of agricultural and food industries?

a) meat

b) flour

c) fresh fish

d) fertilizer

Which of the following statements is true when making a decision between two

alternatives?

a) variable costs may not be relevant when the decision alternatives have the same activity levels

b) variable costs are not relevant when the decision alternatives have different activity levels

c) sunk costs are always relevant

d) fixed costs are never relevant

1 Mark

[16] Which of the following costs is NOT relevant to a special-order decision?

a) direct labour costs to manufacture the special-order units

b) variable manufacturing overhead incurred to manufacture the special-order units

c) portion of the cost of leasing the factory that is allocated to the special order

d) all of the above costs are relevant