Please indicate whether the following statements are true or false by circling a T or an F (true or false)

1. Direct and indirect materials may both come from the same source [ ] [ ]

2. Factory overhead includes the cost of selling and advertising the product [ ] [ ]

3. Fixed costs remain constant in total, the average fixed costs becomes progressively

smaller as the level of activity increases [ ] [ ]

4. Work in process represent goods that have some or all raw materials, some lab-

our and some overhead [ ] [ ]

5. Because managerial accounting is not bound by GAAP, it has nothing to do with

the accounting system relied on by financial accounting [ ] [ ]

6. The purpose of any managerial costing system should be to provide accounting

information to assist management in carrying out its job. [ ] [ ]

7. A variable cost is one whose total dollar amount varies in direct proportion to changes

in the activity level [ ] [ ]

8. Mixed costs are based on what management decides may be necessary to operate effic-

iently at different times [ ] [ ]

9. The Contribution Margin Ratio shows how the Contribution Margin is affected by a

change in total sales [ ] [ ]

10 It is impossible, or difficult to trace Manufacturing Overhead costs to a particular to a

particular product or job [ ] [ ]