9. Consider the following statements: I. Actual costs are determined by plugging the actual level of activity for the period into the cost formulas used in flexible budgets. II. A cost that will be incurred regardless of which alternative is selected is not relevant when choosing between the alternatives. a. I is true; II is true b. I is true; II is false c. I is false; I is true d. I is false; II is false Answer 10. Straight Framing's cost formula for its supplies cost is $1,640 per month plus $10 per frame. For the month of August, the company planned for activity of 570 frames, but the actual level of activity was 600 frames. The actual supplies cost for the month was $7,600. The supplies cost in the FLEXIBLE budget for August would be closest to: a. $7,340 c. $7,600 b. 7,440 d. 7,640 e. None of the above. The answer is Answer 11. Special Company makes a single product. Production and selling prices per unit [based on normal production levels] are: Direct materials \$5.00; Direct labor $3.00; variable manufacturing overhead \$1.00; Fixed manufacturing overhead \$4.50; Variable selling and administrative expense $2.00; And Fixed selling and administrative expense $2.50. An order has been received for 1,000 units at a special price of $14.00 per unit. This order will not affect regular sales. Special Company has enough production capacity to produce the items without changing total fixed costs. If the order is accepted annual profits will: a. Decrease $18,000 d. Increase $4,000 b. Increase $18,000 e. Decrease $3,000 c. Decrease $4,000 f. Increase $3,000 g. None of the above. The answer is