30) Determining the "right" level of capacity is an important strategic decision.

TRUE FALSE

31) Both theoretical and practical capacity measure capacity in terms of demand for the output.

TRUE FALSE

32) Normal capacity utilization is the expected level of capacity utilization for the current budget period, which is typically one year.

TRUE FALSE

Chapter 10 Analysis of Cost Behaviour

33) A linear cost function is a function in which the graph of total costs versus a single cost driver forms a straight line, within the relevant range.

TRUE FALSE

34) When estimating linear cost functions, it is assumed that variations in total cost of a cost object cannot be explained by variations in a single cost driver.

TRUE FALSE

35) A mixed cost has a fixed element.

TRUE FALSE

Chapter 11 Decision Making and Relevant Information

36) A decision model is a formal method of making a choice that uses only quantitative analyses.

TRUE FALSE

37) The purpose of evaluating performance in the decision process is to provide feedback.

TRUE FALSE

38) Anticipated future costs that differ with alternative courses of action are known as relevant costs.

TRUE FALSE

39) The total cost difference between two separate alternatives in a decision-making process is the net relevant cost.

TRUE FALSE

40) Each item included in the relevant-cost analysis should differ according to the alternative being considered and be an expected future revenue or cost.

TRUE FALSE