PART II — TRUE/FALSE Instructions: Designate whether each of the following statements is true or false by circling the T or F. TF 1.If actual

PART II — TRUE/FALSE Instructions: Designate whether each of the following statements is true or false by circling the T or F. TF              1.If actual costs are less than standard costs, the variance is favorable. TF              2.On an income statement prepared under a standard cost accounting system, cost of goods sold is stated at standard costs with variances disclosed separately. TF              3.An unfavorable labor quantity variance indicates the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained. TF              4.Both the book value and the disposal value of an existing asset are relevant in a retain or replace equipment decision. TF              5.A direct labor price standard is frequently called the direct labor efficiency standard. TF              6.The cash payback technique identifies the time period required to recover the cost of the capital investment from the annual cash inflow produced by the investment. TF              7.The primary capital budgeting method that uses discounted cash flow techniques is the cash payback method. TF              8.Intangible benefits in capital budgeting include increased quality, safety, or employee loyalty. TF              9.Normal capacity is the average activity output that a company achieves at its highest level of profit. TF              10.The annual rate of return method is based on accounting data and indicates the profitability of a capital expenditure.

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