Quis 9 -Chapter 25:Short Yerm if the following statements are true or false and then select the correct response below When considering between two models to purchase a new piece of equipment, the cost of each of the models is relevant to the business decision. truck's original cost is relevant when considering whether or not to replace the asset A sunk cost is a cost that was incurred in the past and cannot be changed regardless of what future decisions will be made A True, True, True B. False, False, True C. True, False, True D. False, True, False E. True, False, False 2. Which of the following are true in short term decision making? A Fixed costs and variable costs must be analyzed separately B. All costs behave the same way C Fixed costs will always stay the same D. Costs that don't differ from the alternative are relevant 3. An example of a fixed cost that should not be etiminated with the removal of a product segment would be A. B. C. D. The product segments advertising costs The allocated portion of the Vice-President's Salary Direct Material costs The product manager's salary 4. Turkey Company produces and sells turkey friers. The company operates at a production level of 12,000 friers a year with variable costs of $98 per unit and fixed costs for the company are $112,000. Griswald Inc requests a special order of 2,000 friers for the month of December at a special price of $100. The frier typically sells for $1.20. Common fixed costs would not be impacted if the company accepts the order, but Turkey company would need to rent new equipment at a cost of $5,000. What would be the incremental income if Turkey Company accepted this offer? A $1,000 B. $ 4,000 C. $(4,000) D. $ (1,000) 5. A company produces and sells two different products, Financial data are as follows Product A Product 8 Total Variable costs costs (all ixed 1000) $6,000 erating income(loss) Assume that fluxed costs are all unavoidable and that dropping one product would not impact sales of the other Because the contribution margin of Product B is negative, it should be dropped. A. True B. False