Quiz Concepts 202
Quiz 2
1. Which of the following costs would not be a fixed cost?
C. Sales commissions
2. Product costs include which of the following?
D. Indirect materials
3. As the activity that drives a variable cost increases, the variable cost per unit changes.
B. False
4. Within the relevant range:
B. Fixed costs are fixed
5. Overhead is applied while direct material and direct labor are traced.
A. True
6. Underapplied overhead results when estimated overhead is less than actual overhead at the end of the
period.
B. False
5. Overhead is generally a mixed cost and a product cost
A. True
6. Indirect costs are always fixed costs.
B. False
1. If a company has a negative contribution margin per unit then the variable costs per unit are greater than the
selling price. True
2. A small change in sales can become a larger change in operating income due to operating leverage.
True
1. It is important to exclude any depreciation expense in the cash
budget.
A. True
2. Generally speaking, a bottoms up budget is more likely to be
accepted by the managers, supervisors and employees that have to
meet the requirements of the budget.
A. True
3. The selling and administrative expense budget lists all costs of
production other than direct materials and direct labor.
B. False
4. The first step in the budgeting process is the preparation of a sales
budget.
A. True