Section A: Each question is 2.5 Marks 1) Sunk costs are as relevant as opportunity cost in decision making. A) True 2) A key element in the decision to accept or reject a special offer price on a product or activity is whether the company has excess or unused capacity A) True B) False 3) If a subunit or activity is discontinued, only the avoidable expenses will be saved. A) True B) False 4) In a make-or-buy decision where there are alternative uses for capacity, the opportunity cost of idle capacity is not relevant A) True B) False Qualitative factors are as not important when a company is taking decision. A) True 5) B) False Cost Function is a Mathematical description of how a cost changes with changes in the level of activity A) True 6) B) False Expenses that will no longer be incurred if a particular action is taken is called avoidable 7) expenses. B) False A) True Opportunity costs are irrelevant when company is making a decision. A) True 8) B) False can be explained by changes in the level of a single activity A) True B) False 10) Mixed Costs can be separated into variable and fixed components using regression analysis B) False A) True 11) Qualitative factors are not important in the decision-making process because they can't be measure numerically A) True B) False 12) When opportunity costs exist, they're always relevant B) False A) True 13) When replacing an old machine with a new machine, the trade in value of the old machine is relevant