TRUE/FALSE. (3 points each) Write 'True' if the statement is true and 'False' if the statement is false.

1) A direct cost is a cost that cannot be easily traced to the particular cost object under consideration.

2) All other things the same, an increase in variable expense per unit will increase the break-even point.

3) When a job is completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a debit to Work in Process.

4) A traditional format income statement organizes costs on the basis of behavior.

5) Direct material costs are generally fixed costs.

6) When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods.

7) On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level below the break-even point.

8) The margin of safety in dollars equals the excess of actual sales over budgeted sales.

9) Unit variable cost is expected to remain unchanged as activity changes within the relevant range.

MULTIPLE CHOICE. (3 points each) Circle the one alternative that best completes the statement or answers the question.

10) Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? 

A. The amount paid to the individual who stains the table.
B. The commission paid to the salesperson who sold the table.
C. The cost of glue used in the table.
D. The cost of the wood used in the table.

11) Bretthauer Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing