CHAPTER 8 31-Management accountants gather and analyze relevant information to compare alternatives. TRUE FALSE 32-An "opportunity cost" is best described by which of the following? A) Benefits foregone by choosing a particular alternative course of action B) Costs that were incurred in the past and cannot be changed C) The distribution of all products to be sold D) Expected future costs that differ among alternatives 33-) Managers should consider the potential effect of a special order on long-run profits and operations TRUE FALSE 34-When deciding whether to accept a special order, managers need to consider whether they have available excess capacity. TRUE FALSE 35-) Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates current production of seats: pale price per unit $400 Variable costs per unit: Manufacturing Marketing and administrative $220 $50 Total fixed costs: Manufacturing Marketing and administrative $750,000 $200,000 If a special sales order is accepted for 4,000 seats at a price of $325 per unit, fixed costs remain unchange and no variable marketing and administrative costs will be incurred for this order, how would operatin income be affected? (NOTE: Assume regular sales are not affected by the special order.) A) Increase by $2,180,000 B) Increase by $420,000 C) Increase by $220,000 D) Decrease by $420,000 325-220 s 105x4000 420,000