Classify each of the following costs as relevant or irrelevant to the decision at hand and briefly explain your reason.
a. Cost of barcode scanners purchased six months ago when deciding whether to upgrade to scanners that are faster and easier to use
b. The fair market value of an ice cream truck when deciding whether to replace it with a newer ice cream truck
c. Cost of operating automated production machinery versus the cost of direct labour when deciding whether to automate production
d. Cost of purchasing packaging materials from an outside vendor when deciding whether to continue manufacturing the packaging materials in-house
e. The cost of an expansion site purchased two years ago when deciding whether to sell the site or to expand business to it now
f. The property tax rates in different locales when deciding where to locate the company’s headquarters
g. The interest rate paid on invested funds when deciding how much inventory to keep on hand
h. The gas mileage of delivery vans when deciding which make and model of van to purchase for the company’s delivery van fleet
i. Depreciation expense on old manufacturing equipment when deciding whether to replace it with newer equipment
j. The total amount of a coffee shop’s fixed costs when deciding whether or not to intro- duce a new drink line

  • CreatedApril 30, 2015
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