Question

True of FalseQUESTIONS

1. The simple rate of returnmethod explicitly takes depreciation into account.

2. The payback method doesnot consider the time value of money.

3. All selling andadministrative costs are period costs.

4. Total variable cost willchange in proportion to changes in the level ofactivity.

5. Contribution margin is thedifference between sales and variable expenses.

6. The break-even pointoccurs where the contribution margin is equal to total variableexpenses.

7. Sunk costs maybe relevantin a decision.

8. Future costs are alwaysrelevant in decision-making.

9. If a product has anegative segment margin, the product should bediscontinued.

Opportunity cost may be a key factor in a makeor buy decision