True / False Indicate whether the statement is true or false. 1. If the cost of employee wages is not a significant portion of the total product cost, the wages are classified & direct materials cost. a. True b. False 2. Prime costs are the combination of direct labor costs and factory overhead costs. a. True b. False 3. Depreciation expense on factory equipment is part of factory overhead cost. a. True b. False 4. If factory overhead applied exceeds the actual costs, overhead is said to be underapplied. a. True b. False 5. Equivalent units of production are always the same as the total number of physical units finished during the period. a. True b. False 6. If a department that applies FIFO process costing starts the reporting period with 50,000 physical units that were 25% complete with respect to direct materials and 40% complete with respect to conversion, it must add 12,500 equivalent units of direct materials and 20,000 equivalent units of direct labor to complete them. a. True b. False 7. The fixed cost per unit varies with changes in the level of activity, a. True b. False 8. The relevant range is useful for analyzing cost behavior for management decision-making purposes. a. True b. False 9. The budget procedures used by a large manufacturer of automobiles would probably not differ from those used by a small manufacturer of paper products. a. True b. False