True or False questions

1.In setting standards, historical experience should be used with caution because it can perpetuate operating inefficiencies.

2.Bellair Company produces a product that has manufacturing cost of R30 per unit. Bellair's policy is to charge a price equal to cost plus 30%. The 30% is pure profit to Bellair.

3.Demand is one side of the pricing equation, supply is the other side.

4.A major advantage of mark-up pricing is that standard mark ups are easy to apply.

5.The raw materials account is an inventory account located on the income statement.

6.The cost of raw materials used is usually a fixed cost.

7.Determining cost behavior is not essential to planning, controlling, and decision making.

8.Management accounting information is only used by manufacturing organisations.

9.Price must be greater than cost in order for the firm to generate revenue.

10. Indirect costs are the costs that are not easily and accurately traced to cost object.