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Which of the following is true regarding the treatment of allocated common fixed costs when making decisions about dropping a product? Movimie Chaco Multiple Choice O o Allocating common fixed costs to products increases each product's contribution margin. alocating commentare cost to produce Common fixed costs should be allocated to products based on their sales revenue as this best reflects each product's ability to bear the costs. O Allocated common fixed costs should be considered irrelevant because they will not be eliminated if the product line is dropped. O Allocating common fixed costs to products may overstate the true profitability of the product. Burgers R Us purchased a new fryer for $45,000 to replace its old fryer. The new fryer has a 5 year life and an expected salvage value of $6,000. The old fryer will be sold immediately for its salvage value of $10,000. Annual cost savings from the new fryer are expected to be $12,000 per year. The payback period of the new machine is closest to: Multiple Choice 4.0 years 3.8 years oooo 2.0 years 2.0 years 2.9 years