Modified True/ False (20 points, 1 point each). There are twenty statements below. Some are true and some are false. Please write the word true or false in the space provided. If the statement is false, you must correct it for any credit. No credit will be given otherwise.

11. Activity-based costing may take into account salespersons salaries for those that sell one product exclusively.

_______12. Direct labor hours are a preferred base for allocating overhead, especially in capital intensive industries.

_______13. Organizational sustaining activities may include the production managers salary.

_______14. The cost of the security guard for the main company office may not be assigned to a product under an activity based costing system.

_______15. First stage of the allocation process gives us cost of activity, and second stage allocation measures the total cost of a particular activity.

_______16. The cash budget is the starting point in the master budget process.

_______17. The flexible budget is used in the master budgeting process.

_______18. A static planning budget is the same as the master budget.

_______19. Differences between the static planning budget and the flexible budget are a result of differences in activity levels.

_______20. If a material price variance is favorable, but the material quantity variance is unfavorable, this may indicate that the materials used were of poor quality.