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Unformatted text preview: c Student: ___________________________________________________________________________ 1. Fixed cost per unit of output remains constant regardless of the level of output. True False 2. Fixed cost remains constant regardless of the level of output. True False 3. Variable cost changes directly in proportion with changes in the level of output. True False 4. Variable cost per unit is constant regardless of the level of output. True False 5. Fixed cost includes variable overhead expenses such as utility bills. True False 6. Variable costs include expenses such as rent, property taxes, insurance payments, and salaries of top management. True False 7. Sunk costs are expenses or investments that continue to exist and do not change regardless of a decision being made. True False 8. Sunk costs are the cost of repaying certain bonds through sinking funds. True False 9. Opportunity cost is the benefit forgone resulting from choosing an inferior course of action. True False 10. Opportunity cost is the price of obtaining an opportunity. True False 11. Risk is inherent in any investment. True False 12. A risk-free investment is called "sure-fire" because the predicted returns are certain. True False 13. Expected value is the expected outcome multiplied by the probability of its occurrence. True False 14. Expected value is the anticipated selling price of a fixed asset, like corporate real estate. True False 15. The economic life of a machine is the period over which it provides the best method for performing its task. True False 16. Depreciation is a method for allocating costs of capital equipment to future time periods when it will continue to be used. True False 17. Depreciation is an annual assessment reflecting management's judgment about the gradual wasting away of assets as they become older. True False 18. Amortization and depreciation have different meanings. True False 19. The purpose if the sum-of-the-years'-digits (SYD) method is to reduce the book value of an asset rapidly in early years and at a lower rate in the later years of its life. True False 20. Activity-based costing techniques have been developed to alleviate accounting problems by refining overhead allocation processes to more directly reflect actual proportions of overhead consumed by the production activity. True False 21. While cost-driver selection is an informative part of activity-based costing, it is not a required part of the methodology. True False 22. Activity-based costing is sometimes referred to as transaction costing. True False 23. Investment decisions are made to yield the lowest acceptable rate of return. True False 24. Investment alternatives are generally ranked according to the return they yield in excess of their cost of capital....
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This note was uploaded on 01/05/2012 for the course COMMERCE 398 taught by Professor Dale during the Spring '11 term at The University of British Columbia.
- Spring '11