1. A variable cost is a cost whose cost per unit varies as the activity level rises and falls. (1 Point) True False 2. A decrease in production will ordinarily result in an increase in fixed production costs per unit. (1 Point) True False 3. Discretionary fixed costs arise from annual decisions by management to spend in certain fixed cost areas. (1 Point) True False 4. In any decision making situation, sunk costs are irrelevant and should be ignored. (1 Point) True False