Question

T or F

1.Costs that are not realted to any specific product, batch, or unit of productions are referredn to as facility level costs.

2.Pro forma financial statements are financial statements that are prepared based on budgetd future amounts.

Answer 1

1.True

Explanation : Costs that are incurred in reltion to units of a product are unit level costs. Costs that are incurred in relation to batches of product are batch level costs. Costs that are incurred in reation production of a particular product are product level costs.

But facility level costs are incurred in relation to overall operation of an organization. They help in carrying on production process of all products an organization engaged in. They are not incurred in relation to specific units, batches or products.

2.True

Financial statements which are prepared using some assumptions, estimations, expected scenarios are called pro forma financial statements.