1. Overcosting a particular product may result in:

a. overstating total costs of all the products.

b. gain or market share for the product.

c. higher profits per unit for the product.

d. operating efficiencies.

2. A company with sales of $100,000, variable costs of $70,000, and fixed costs of $50,000 will reach its breadk-even point is sales are increased by $20,000.

True

False

3. Careful attention to motivation is a key step for the organization and its employees to align their respective goals.

True

False

4. Selling price per unit is $60, variable cost per unit is $30, and fixed cost per unit is $20. When this company operates above the break-even point, the sales of one more unit will increase net income by $10.

True

False

5. The first step in designing an activity-based cost system is to develop an activity dictionary.

True

False