TRUE $/$ FALSE

$A=$ True; $B=$ False

Fixed costs stay the same, on a per$-$unit basis, as activity level changes.

A cost that will occur in the future and differs between various alternatives under consideration is a

relevant cost.

When manufacturing overhead is applied to a job, a credit is made to the Work in Process account.

Prime costs include direct materials, direct labor, and manufacturing overhead.

The gross margin is calculated by subtracting total non$-$manufacturing cost per unit from the unit sale

price.

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overheac

underapplied.

A volume$-$based allocation measure is directly related to the number of units produced or the numbe

customers served.

The cost measurement system can impact how indirect costs are spread among product lines, whicl

affect decisions managers make.

Managers of small, private corporations use managerial accounting information whereas managers

large, public corporations use financial accounting information.

Activity$-$based costing is not appropriate for service providers since they do not have manufacturin

overhead that needs to be assigned to products.

Disposing of the balance in Manufacturing Overhead required making a direct adjustment to Cost

Goods Sold.

A value$-$added activity is one that enhances the perceived value of the product or service to the

A marketing consulting firm would most likely use process costing.

Managerial accounting is primarily concerned with managers and external users.

An opportunity cost is the cost of not doing something.