1) Which of the given will cause income determined with absorption costing to be higher than income determined with direct costing?
i) Units produced equals units sold
ii) Units produced is greater than units sold
ii) Units produced is less than units sold
iv) Income determined with absorption costing will always equivalent income determined with direct costing
2) For partial value chain functions given below, which sequence is right?
i) Design, production, marketing
ii) Marketing, production, distribution
iii) Research and development, production, distribution
iv) Customer service, marketing, distribution
3) Example of cost probable to have indirect relationship with products being manufactured:
i) Production lab or costs
ii) Raw material costs
iii) Electricity costs for packaging equipment
iv) None of the above
4) Costs may be assigned to product or activity for many purposes, but care should be exercised when using allocated costs because:
i) Direct costs recognized with product or activity may not be correctly assigned
ii) Fixed costs will change in total if volume of activity changes
iii) All costs may not have been assigned to product or activity
iv) Randomly assigned costs may not behave in way assumed in allocation method