Part 1. True / False (2 points each) 1. Direct labor combined with factory overhead is called prime cost. TF TF 2. If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor hours, then jobs with high direct labor requirements will tend to be under costed relative to jobs with low direct labor requirements. I TF 3.When a job is completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a debit to Work in Process. TF 4.A factory supervisor's salary would be classified as an indirect cost with respect to a unit of product. T F 5.A manufacturing organization is a business that purchases finished products and resells them to consumers. 6. Beginning inventory + Cost of goods manufactured ending inventory = Cost of goods sold. TF 7. Variable costs remain unchanged in total regardless of production volume. TF 8. Fixed cost per unit will move inversely with production volume. TF