increase on a per-unit basis as the activity level decreases .
None of the above Question 5 . Question : ( 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 . Student Answer : Only statement I is true . Only statement II is true . Both statements I and II are true . Statements I , II , and III are true . Question 6 . Question : ( TCO B ) A job-order cost system is employed in those situations when Student Answer : many different products , jobs , or batches of production are being produced each period . manufacturing involves a single , homogeneous product that flows evenly through the production process on a continuous basis . the product moves from department to department before being completed . the unit cost of production is computed by dividing the total production costs by the number of units produced . Question 7 . Question : ( TCO B ) The FIFO method only provides a major advantage over the weighted-average method in that Student Answer : 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 . Question 8 . Question : ( TCO C ) The contribution margin ratio always increases when the Student Answer : fixed expenses increase . fixed expenses decrease .