Question 1. Indirect labor is a part of:
- prime cost,
- conversion cost,
- period cost,
- or nonmanufacturing cost?
Question 2. Fixed costs expressed on a per unit basis:
- will increase with increases in activity,
- will decrease with increases in activity,
- are not affected by activity,
- or should be ignored in making decisions since they cannot change?
Question 3. Depreciation on a personal computer used in the marketing department of a manufacturing firm would be classified as:
- a product cost that is fixed with respect to the company's output,
- a period cost that is fixed with respect to the company's output,
- a product cost that is variable with respect to the company's output,
- or a period cost that is fixed with respect to the company's output?