Chapter 2, Problem 26E

Basic Concepts

For each of the following statements, indicate whether it is true, false, or uncertain. Explain why. Give examples in your answer.

1. a.       A cost is something used up to produce revenues in a particular accounting period.
2. b.       Variable costs are direct costs; only fixed costs are indirect costs.
3. c.       The cost of direct materials is fixed per unit but variable in total.