a. 1^st statement is correct; 2^nd statement is correct

b. 1^st statement is correct; 2^nd statement is incorrect.

c. 1^st statement is incorrect; 2^nd statement is correct.

d. 1^st statement is incorrect; 2^nd statement is incorrect.

1. The portion of an asset's value on the balance sheet is referred to as an expired cost.

A company's break-even point is the level where total revenues equal total costs.

2. Absorption costing is more useful than variable costing in determining a company's break-even point.

A company that manufactures custom bridal gowns will use a job order costing system to track production costs

3. A variable cost remains constant on a per-unit basis as production increases

Variable costing is more useful than absorption costing in determining a company's break-even point.

4. A company that manufactures large quantities of homogenous goods will use a job order costing system.

Total variable costs vary directly with levels of production.

5. Variable costs per unit vary directly with levels of production.

An indirect cost can be easily traced to a cost object.

6. Fixed cost per unit varies directly with production.

In an actual job-order costing system, factory overhead is assigned to a job continuously during the production process.

7. In a job order costing system, costs are accumulated for each individual job

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a mixed cost.

8. A predictor which has an absolute cause and effect relationship to a cost is referred to a cost driver.

When raw materials are placed into production, the materials inventory account is debited

9. When manufacturing overhead is charged to a job, the work in process account is debited.

Total fixed costs vary inversely with levels of production.

10. Unexpired costs are reflected on the balance sheet.

Break-even point may be expressed in terms of units or pesos.

11. When manufacturing overhead is charged to a job, the manufacturing overhead account is debited.

Dividing total fixed costs by the contribution margin ratio yields break-even point in sales pesos.

12. When using CVP analysis to determine sales level for a desired amount of profit, the profit is treated as an additional cost to be covered.

Distribution costs are an example of product costs.

13. Overapplied factory overhead that is material in amount is closed to cost of good sold at year end.

In a multi-product environment, CVP analysis makes the assumption that a company's sales mix is constant.

14. The margin of safety is an effective measure of risk for a company.

In an actual cost system, actual production overhead costs are accumulated in an Overhead Control account and assigned to Work in Process at the end of the period.

15. In CVP analysis, sales and production are assumed to be equal.

In a normal cost system, factory overhead is applied to Work in Process using a predetermined overhead rate.

16. CVP analysis requires costs to be categorized as

a.	either fixed or variable.
b.	fixed, mixed, or variable.
c.	product or period.
d.	standard or actual.

17. With respect to fixed costs, CVP analysis assumes total fixed costs

a.	per unit remain constant as volume changes.
b.	remain constant from one period to the next.
c.	vary directly with volume.
d.	remain constant across changes in volume.

18. CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total

a.	fixed costs decrease.
b.	variable costs remain constant.
c.	costs decrease.
d.	costs remain constant.

19. According to CVP analysis, a company could never incur a loss that exceeded its total

a.	variable costs.
b.	fixed costs.
c.	costs.
d.	contribution margin.

20. CVP analysis is based on concepts from

a.	standard costing.
b.	variable costing.
c.	job order costing.
d.	process costing.

21. Cost-volume-profit analysis is a technique available to management to understand better the interrelationships of several factors that affect a firm's profit. As with many such techniques, the accountant oversimplifies the real world by making assumptions. Which of the following is not a major assumption underlying CVP analysis?

a.	All costs incurred by a firm can be separated into their fixed and variable components.
b.	The product selling price per unit is constant at all volume levels.
c.	Operating efficiency and employee productivity are constant at all volume levels.
d.	For multi-product situations, the sales mix can vary at all volume levels.

22. In CVP analysis, linear functions are assumed for

a.	contribution margin per unit.
b.	fixed cost per unit.
c.	total costs per unit.
d.	all of the above.

23. Which of the following factors is involved in studying cost-volume-profit relationships?

a.	product mix
b.	variable costs
c.	fixed costs
d.	all of the above

24. Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only

a.	fixed and mixed costs.
b.	relevant fixed costs.
c.	relevant variable costs.
d.	a relevant range of volume.

25. After the level of volume exceeds the break-even point

a.	the contribution margin ratio increases.
b.	the total contribution margin exceeds the total fixed costs.
c.	total fixed costs per unit will remain constant.
d.	the total contribution margin will turn from negative to positive.