State True or False [10*2=20) l.In determining the selling price of a special order that can be completed using existing capacity, the xed costs per unit should be included in the consideration of the costs of the special order. Ans: 2.Residual income is the net operating income that an investment center earns above the minimum required return on the investment in operating assets. Ans: 3.The production budget includes detailed information as to the number of units of direct materials and the number of direct labor hours required for each budget period for a manufacturing business. Ans:| 4.The standard cost card for a product includes a list of all inputs required to complete one unit of the product with the standard quantity and standard cost of each input. Ans: 5.Activitybased costing is only useful in allocating manufacturing overhead costs. Ans: 6.Sunk costs are irrelevant in making decisions. Ans: 7.Advertising costs are considered product costs for external nancial reports since they are incurred to promote specic products. Ans: 8. Management by exception means that a manager's attention is directed toward those parts of the organization where variances between actual and budget are signicant. Ans: 9. Projects with shorter payback periods are always more protable than projects with longer payback periods. Ans: 10.ROI and residual income can be used as performance measures. Ans