Question 1 Statement: Cost behavior refers whether a particular expense has been ethically incurred. Statement Il: An inaccurate classification of inventoriable and period costs could lead to violations of the matching principle, which states that costs used in producing revenue should be matched on the income statement when the revenue is recognized. Both Statements are True Only Statement Il is True O Only Statement is True Both Statements are False Question 2 Statement is to take advantage of changing market opportunities, the annual budget should be strictly enforced to ensure the timeliness of management reports. Statement ll: A budget may be used as a planning tool, but NOT as a control tool. O Both Statements are True Both Statements are False Only Statement is True o Only Statement II is True Question 3 Statement : All manufacturing costs are inventoriable costs. Statement I: All Indirect costs may be included in conversion costs. O Both Statements are False o Both Statements are True o Only Statement Il is True o Only Statement is True Question 4 Statement : Cost concepts such as variable, fixed, mixed, direct, and indirect apply only to manufacturers and not to service companies. Statement Il: Product costs can refer to expenditures necessary to finish products and to the administrative support during the time period. O Both Statements are False Both Statements are True o Only Statement is True o Only Statement Il is True