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1. Which of the given below is the ex of variable cost?

a. Insurance premium for fire insurance on the factory building
b. The salary of the company president
c. Wood used to make custom tables
d. Rent for use of a storage warehouse
e. Depreciation on the factory building

2. Which one of the given statements best describes why companies wish to differentiate between direct and indirect costs?

a. To estimate business segments on the basis of only those costs directly traceable to each segment
b. To better find out whether company is large organization or a small organization
c. To find out the sales prices necessary to break even
d. To better differentiate between variable and fixed costs for each product
e. To better differentiate between materials costs and labor costs

Accounting Basics, Accounting

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