1. Reluctance of managers to lay off employees when activity refuses in short-run leads to increase in ratio of variable to fixed costs.
i) True
ii) False
2. Fixed costs expressed on per unit basis vary inversely with changes in activity.
i) True
ii) False
3. Contribution margin and gross margin mean same thing.
i) True
ii) False
4. Generally speaking, it is the responsibility of production department to see that material usage is kept in line with standards.
i) True
ii) False
5. Practical standards permit for normal machine downtime and employee rest periods.
i) True
ii) False