Q1. State whether the following statements are True/False- (2 marks each)

a) Total fixed costs change with changes in volume of activity.

b) A process costing system is used by companies that produce similar or identical units of product.

c) Both process costing and job costing typically include three product costs direct materials, direct labour, and manufacturing overhead.

d) A bike repair shop would most likely use a process costing system.

e) A job costing system would be appropriate for an oil refinery.

f) The break-even point is the number of units or sales dollars that must be sold to achieve zero profit.

g) Contribution margin per unit is calculated by subtracting variable costs per unit and fixed costs per unit from the selling price per unit.

h) Direct materials do not include small inexpensive items such as nails or glue.

i) Financial accounting uses accounting rules based on US GAAP.

j) Manufacturing costs are also called Product cost.