Swenson's Meats is considering whether it should replace a meat grinder patty shaper machine. The new machine
Question:
For each of the following costs, indicate whether each of the costs described would be relevant or not to Swenson's Meats' decision about whether to purchase the new machine or to keep the old machine.
________________________Item Relevant Not Relevant
a. Cost of new machine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b. Cost of old machine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c. Added profits from increase in production resulting from new machine . . . . . . . . . . . . . . . . . .
d. Fixed selling costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
e. Variable selling costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
f. Sales value of old machine . . . . . . . . . . . . . . . . . . . . . . . . . .
g. Interest expense on new machine . . . . . . . . . . . . . . . . . . . .
h. Interest expense on old machine . . . . . . . . . . . . . . . . . . . . .
i. Book value of old machine . . . . . . . . . . . . . . . . . . . . . . . . . .
j. Maintenance cost of new machine. . . . . . . . . . . . . . . . . . . .
k. Repairs and maintenance costs of old machine . . . . . . . . . .
l. Installation costs of new machine. . . . . . . . . . . . . . . . . . . . .
m. Accumulated depreciation on old machine . . . . . . . . . . . . .
n. Cost per pound of hamburger . . . . . . . . . . . . . . . . . . . . . . .
o. Installation cost of old machine . . . . . . . . . . . . . . . . . . . . . .
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