True of False QUESTIONS

1. The simple rate of return method explicitly takes depreciation into account.

2. The payback method does not consider the time value of money.

3. All selling and administrative costs are period costs.

4. Total variable cost will change in proportion to changes in the level of activity.

5. Contribution margin is the difference between sales and variable expenses.

6. The break-even point occurs where the contribution margin is equal to total variable expenses.

7. Sunk costs maybe relevant in a decision.

8. Future costs are always relevant in decision-making.

9. If a product has a negative segment margin, the product should be discontinued.

Opportunity cost may be a key factor in a make or buy decision