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1. (TCO B) Which of the following statements is true? I. Overhead application may be made slowly as a job is worked on. II. Overhead application may be made in a single application at the time of completion of the job. III. Overhead application should be made to any job not completed at year end in order to properly value the work in process inventory.

Only statement I is true.

Only statement II is true.

Both statements I and II are true.

Statements I, II, and III are true. (TCO B) Under a job-order costing system, the product being manufactured is homogeneous. passes from one manufacturing department to the next before being completed. can be custom manufactured. has a unit cost that is easy to calculate by dividing total production costs by the units produced. TCO A) Wages paid to an assembly line worker in a factory are a Prime Cost YES.....Conversion Cost YES. Prime Cost YES.....Conversion Cost NO. Prime Cost NO....Conversion Cost NO. Prime Cost NO.....Conversion Cost YES. TCO A) Total fixed costs will increase with increases in activity. will decrease with increases in activity. are not affected by activity. should be ignored in making decisions because they can never change. (TCO C) To obtain the break-even point in terms of dollar sales, total fixed expenses are divided by which of the following? Variable expense per unit Variable expense per unit/selling price per unit Fixed expense per unit (Selling price per unit - variable expense per unit) / selling price per unit (TCO D) In an income statement prepared using the variable costing method, fixed manufacturing overhead would not be used. be used in the computation of the contribution margin. be used in the computation of net operating income but not in the computation of the contribution margin. be treated the same as variable manufacturing overhead. (TCO C) The contribution margin ratio always decreases when the fixed expenses increase. fixed expenses decrease. variable expenses as a percentage of net sales increase. variable expenses as a percentage of net sales decrease. (TCO B) The FIFO method only provides a major advantage over the weighted-average method in that the calculation of equivalent units is less complex under the FIFO method. the FIFO method treats units in the beginning inventory as if they were started and completed during the current period. the FIFO method provides measurements of work done during the current period. the weighted-average method ignores units in the beginning and ending work-in-process inventories.

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