True/False Questions 1. A potential danger from outsourcing is that a company may become too dependent on the supplier. True False 2. Segment reports are financial statements and other information prepared for parts of a business, such as departments, stores, and sales territories. True False 3. An increase in total fixed costs lowers the break-even point. True False 4. A company can use cost-volume-profit analysis to determine the level of sales required to earn a target profit. True False 5. The book value of equipment owned by a company is a sunk cost and should not be taken into account in deciding whether or not to replace the equipment. True False 6. Fixed costs are relevant for decision making if they vary between the alternatives and are future-oriented. True False 7. Only variable costs are relevant for decision making. True False 8. A margin of safety of 20% means that every dollar in revenue generates twenty cents in profit. True False