Answer:\ \ 1. Relevant cost are those cost which helps in decision making, it varies with the acceptance and rejection of proposal . Here the Variable costs are only relevant. On the other hand, non-relevant cost are those cost that has no impact on decision making since it will not vary with the acceptance and rejection of proposal . Here the Fixed costs are not relevant.\ \ 2.\ \ Contract Revenue (per mile)\ \ $2.15\ \ Variable Expenses (per mile)\ \ $1.39\ \ Contribution Margin (per mile)\ \ $0.76\ \ Loads/week\ \ 2\ \ Miles/load\ \ 1,500\ \ Weeks/year\ \ 52\ \ Expected Annual Mileage (1,500 * 2 * 52)\ \ 156,000\ \ Annual Contribution ($0.76 * 156,000)\ \ $118,560\ \ Income from operation will increase by 3.22% (118,560 / 3,681,810) by accepting the proposal.\ \ Based on calculation of profitability, it is recommended that the proposal is accepted.