10) Which of the following statements is true of activity based conting? A) There is a clear cause-and-effect relationship between costs and the cost driver in the long run. B) There is no variety of cost drivers and cost pools. C) The system focuses on activities in together and not on individual activities D) A single cost driver should be identified for all the activities 11) The formal process of choosing between alternatives is known as afn) A) relevant model B) decision model C) alternative model D) prediction model 12) Flash City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. With a 75.cent price increase, demand is expected to fall by 7,000 units. Demand Selling price Incremental cost per unit Current Projected 79,000 units 72,000 units $9.25 $5.80 $8.50 $5.80 If the price increase is implemented, operating profit is projected to A) increase by $35,100 B) decrease by $5,250 C) increase by $5,250 D) decrease by $7,000 13) Sunk costs A) are future costs for decision making B) are avoidable costs C) are irrelevant for decision making D) are foregone contribution by not using a limited resource in its next-best alternative use A relevant revenue is revenue that is a(n) A) past revenue and differs among alternative courses of action B) future revenue and differs among alternative courses of action C) in-hand revenue D) earned revenue 14) A) include financial information, but not nonfinancial information B) include both financial and nonfinancial information C) are always relevant when making decisions D) include employee morale 15) Quantitative factors