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Which one of the following statements is correct (true)? Multiple Choice C) Sunk costs are sometimes relevant in decision making. 0 Variable costs are always
Which one of the following statements is correct (true)? Multiple Choice C) Sunk costs are sometimes relevant in decision making. 0 Variable costs are always relevant costs in decisions. variabi O Fixed costs are never relevant in a decision O A product whose revenues do not cover its variable costs and its traceable fxed costs should usually be dropped. Two divisions of Neptune Company reported the following operating results for last year: Sales Variable costs Contribution margin Traceable fixed costs Segment margin Allocated common corporate fixed costs Net operating income (loss) Beer Wine Division Division $6ee,000 $350,000 250,000 220,000 350,000 130,080 160,000 110,000 190,000 20,000 80,000 45,000 $110,000 $(25,880) Because the Wine Division sustained a loss, the president of Neptune Company is considering the elimination of this division. All of the Wine division's traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. The financial advantage (disadvantage) to the company of the Wine division had been eliminated at the beginning of the year would have been: Multiple Choice O ($20,000) O $20.000 $25,000 ooo O $25,000)
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