F____ 1. A specific product cannot be a cost object.

T____ 2. If the cost of an additive is $5,000 + $0.50 for every unit of solvent produced, the cost is classified as a mixed cost.

_F___ 3. A variable cost will be an effective cost driver.

_T___ 4. Retailers generally have a much lower degree of conversion than do manufacturing or professional firms.

__F__ 5. In a service industry, direct materials are usually significant in amount and can be easily traced to a cost object.

F____ 6. In an actual cost system, actual production overhead costs are typically accumulated in an Overhead Control account and assigned to Work in Process at the end of the period.

__T__ 7. In an actual cost system, factory overhead is applied to Work in Process using a predetermined overhead rate.

_F___ 8. In an actual cost system, overhead is assigned to Work in Process Inventory with a credit entry to the account.

T 9. Variable costing is commonly used for internal reporting.

_T___ 10. If underapplied factory overhead is material, it is prorated among Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

__F__ 11. Practical capacity does not adjust for routine downtime in a production process.

__T__ 12. Practical capacity is the capacity that can be achieved during normal working hours.

___T_ 13. The high-low method excludes outliers from the calculation of the slope of a regression line.

____T 14. A flexible budget is a planning document that presents expected variable and fixed overhead costs at different activity levels.

__T__ 15. If sales exceed production, absorption costing net income exceeds variable costing net income.

___F_ 16. Business value-added activities add value to a product.

___T_ 17. Management should strive to reduce or eliminate non-value added activities from a production process.

_T___ 18. Unit