5. ABC company is trying to decide which of two different kinds of chips to sell...

  

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5. ABC company is trying to decide which of two different kinds of chips to sell in the retail store. One type is a name-brand chip that will practically sell itself. The other chip is less expensive to purchase but does not carry an identifiable brand name. The Controller believes the company would have to incur significant advertising costs to sell this chip. Costs for the two chips are detailed below. Brandless Chips Cost per box Sales Commission per box Name-Brand Chips $5.00 Cost per box $7.00 Sales Commission per $1.50 $1.50 box Rent of display space Advertising $700.00 Rent of display space $700.00 $4,500.00 Advertising $3,000.00 Identify each cost as relevant or irrelevant to the decision-making process. Cost per box is Sales commission per box is Rent of display space is Advertising is 5. ABC company is trying to decide which of two different kinds of chips to sell in the retail store. One type is a name-brand chip that will practically sell itself. The other chip is less expensive to purchase but does not carry an identifiable brand name. The Controller believes the company would have to incur significant advertising costs to sell this chip. Costs for the two chips are detailed below. Brandless Chips Cost per box Sales Commission per box Name-Brand Chips $5.00 Cost per box $7.00 Sales Commission per $1.50 $1.50 box Rent of display space Advertising $700.00 Rent of display space $700.00 $4,500.00 Advertising $3,000.00 Identify each cost as relevant or irrelevant to the decision-making process. Cost per box is Sales commission per box is Rent of display space is Advertising is