15. A basic assumption of the cost-volume-profit model is that A) All costs are classified as mixed costs B) The total cost function is linear outside of the relevant range Either a company sells a single product or the sales mix of multiple products c) remains constant D) More than one cost driver is required 16. George Company has sales of 1,500 units at $35 per unit. Variable expenses are 40% of the selling price. If total fixed expenses are $27,000, the degree of operating leverage is: A) 1.75 B) 3.00 c) 7.00 D) 3.50 17. For decision making, which of the following are relevant costs? A) Fixed costs that do not change in the short run B) Sunk costs C) Differential costs D) All the above 18. Minnesota Company has collected the following information regarding one of its components: Cost to outsource (buy) one unit Production (making) costs per unit Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit $44 $24 $12 $1 Total yearly fixed manufacturing overhead Number of units required in a year $85,000 1,000 If the component is out sourced, $32,000 of fixed manufacturing overhead which is yearly compensation of the production director will be eliminated