Question: EXERCISE 7-9. Sunk, Avoidable, and Opportunity Costs Consider the information in exercise 7-8 and identify the following statements as true or false. a. Supervisory salary

EXERCISE 7-9. Sunk, Avoidable, and Opportunity Costs Consider the information in exercise 7-8 and identify the following statements as true or false.

a. Supervisory salary is an avoidable cost if the company decides to buy the valves.

b. Depreciation of building is an avoidable cost if the company decides to buy the valves.

c. The $50,000 cost of leasing space is an opportunity cost associated with continuing production of the valve.

d. The depreciation of equipment is an opportunity cost associated with continuing production of the valve.

e. Depreciation of building is a sunk cost even if the company continues with production of the valve.

f. Supervisory salary is a sunk cost even if the company continues with production of the valve.

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