Respond that the following statements are TRUE or FALSE:

1) If a company allows division managers to negotiate a cost-based transfer price, it is better to use actual costs rather than standard costs. Otherwise, the selling division has no motivation to control costs.

2) A sunk cost is a cost that was incurred in the past and cannot be changed regardless of which future action is taken.

3) Managers' decisions are based primarily on quantitative data because the qualitative factors are not usually relevant to the decision making process.

4) If a company is a price-taker, it has considerable flexibility in setting its products' prices.