Select the answer which best completes the statement:

1. Conversion cost is equal to the total of: (i) direct labor and raw material; (ii) direct labor and factory overhead; (iii) indirect labor and factory overhead; (iv) factory overhead and raw materials.
2. Prime costs are: (i) the first cost incurred on a job; (ii) indispensable as distinguished from avoidable costs; (iii) direct materials and direct labor; (iv) cost incurred in service departments as out-of-pocket cost.
3. The term that is most descriptive of the type of cost accounting often called direct costing is (i) Out of pocket costing; (ii) Variable costing; (iii) relevant costing; (iv) prime costing.
4. When using direct costing information, the contribution margin discloses the excess of: (i) revenue over fixed cost; (ii) projected revenue over the breakeven point; (iii) revenue over variable cost; (iv) variable cost over fixed cost.