18. In make-or-buy decisions for a part for a product, relevant costs include ________.

A) all variable costs of making the part

B) some variable costs of making the part

C) fixed costs that can be avoided in the future if the part is purchased

D) A and C

21. Department A covers one section of a large factory building. Which of the following costs is relevant to the decision to eliminate Department A?

A) Heating expenses of building allocated to Department A

B) General corporate overhead allocated to Department A

C) Salary Expense of Supervisor in Department A; he only works in Department A

D) Depreciation Expense on store building allocated to Department A

24. The following is a useful rule of thumb when making operational decisions. Managers should NOT use ________.

A) variable cost per unit

B) total variable costs

C) fixed cost per unit

D) total fixed costs

25. Which of the following statements about budgets and budgeting is FALSE?

A) Budgets help coordinate financial and operational activities.

B) The vast majority of managers use budgeting as an effective cost management tool.

C) Budgeting is the process of formulating an organization's plans.

D) Managers do not use budgets for performance evaluation.