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5-6question

(5) Why do managers consider direct costs to be more accurate than indirect costs? A. When costs are allocated, managers are less certain whether the cost allocation base accurately measures the resources demanded by a cost object, and therefore, direct costs are considered to be more accurate. B. Cost tracing, which is used when assigning direct costs to a particular cost object, is more accurate than cost allocation, which is used to assign indirect costs to the same cost object. C. Allocating indirect costs is more subjective and generally more difficult to assign to a cost object than are direct costs. Therefore, direct costs are deemed by managers to be more accurate costs than indirect costs. D. All of the above. (6) Choose the correct description of variable and fixed costs. A. A variable cost changes in total in proportion to changes in the related level of total activity or volume, such as a sales commission that is a percentage of each sales revenue dollar. A fixed cost remains unchanged in total for a given time period, despite wide changes in the related level of total activity or volume, such as a fixed annual leasing cost of a machine. B. A variable cost is considered to be a unit cost, such as the per-attendee-cost of hiring a musical group to perform at an event. A fixed cost is considered to be a total cost, such as the total fee paid to the musical group for performing at the event. C. A variable cost is related to a particular cost object and can be traced to it in an economically feasible way, such as the cost of steel in the manufacturing of a luxury car. A fixed cost is related to a particular cost object but cannot be traced to it in an economically feasible way, such as the salary of a plant manager who oversees production of many different types of luxury cars produced at the same plant. D. All of the above. LI