1. Assume that a company operating at less than capacity has a chance to accept a special order at a lower than usual price from a customer in a market separate from the regular market. The only relevant costs are the variable costs. The order should not be accepted if the company's average unit cost is greater than the proposed sales price.

Group of answer choices

True

False

2.

Department 2 of Simmons, Inc. has revenues of $300,000, variable expenses of $180,000, and allocated, indirect fixed expenses of $150,000. If the department is eliminated, what will be the effect on net income?

Group of answer choices

$ 30,000 increase

$ 30,000 decrease

$120,000 decrease

$150,000 decrease

3.

If a company is going to make a special bid, the minimum bid should be for the amount of total variable costs.

Group of answer choices

True

False

4.

Sunk costs are:

Group of answer choices

All of the other answers are correct.

past costs.

costs such as the previous year's wages.

irrelevant for decision making.