1. T/F: A companys hurdle rate can be higher than it s cost of capital

2. T/F: A project should be rejected if its internal rate of return is lower than the hurdle rate.

3. T/F: In deciding whether to sell a product as is or process it further, you should always process the product further if it s contribution margin per unit will be higher after being processed further

4. T/F: profit from byproducts will reduce the cost of goods sold of the main products

5. under absorption costing, gross profit is equal to:

a. sales - period costs

b. sales - product cost

c. sales - product cost - period cost

6. Under variable costing, contribution margin is equal to:

a. sales - variable cost

b. sales fixed cost

c. sales - variable costs- fixed costs

7. in determining inventory costs, which of the following will be included under both variable costing and absorption costing

a. sales commision

b. office staff salary

c. direct materials

8. Which of the following is not an advantage of variable costing over absoprtion costing

a. cost information under variable costing is ready for CVP analysis

b. income under variable costing can be used for external reporting

c. income under variable costing follows sales volume

d. variable costing is always more advantageous