For the past ten years, RM Company has produced small gas motors that fit into its...

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For the past ten years, RM Company has produced small gas motors that fit into its main product line of weed-cutting machine. As material costs have steadily increased, the controller of RM Company is reviewing the decision to continue making the small motors and has identified the following: 1. The equipment used to manufacture the gas motors has a book value of P 350,000. 2. The space now occupied by the gas motor manufacturing department could be used to eliminate the need for storage space now being rented. 3. Units can be purchased from an outside supplier for P 89.95. 4. Five of the persons who work at the gas motor manufacturing department would be terminated and given severance pay. 5. P 25,000 unsecured note is still outstanding on the equipment used in the manufacturing process. Which of these items are relevant to the decision that the controller is to make? O B, C, D and E A, B, D and E O B, C and D O A, C and D For the past ten years, RM Company has produced small gas motors that fit into its main product line of weed-cutting machine. As material costs have steadily increased, the controller of RM Company is reviewing the decision to continue making the small motors and has identified the following: 1. The equipment used to manufacture the gas motors has a book value of P 350,000. 2. The space now occupied by the gas motor manufacturing department could be used to eliminate the need for storage space now being rented. 3. Units can be purchased from an outside supplier for P 89.95. 4. Five of the persons who work at the gas motor manufacturing department would be terminated and given severance pay. 5. P 25,000 unsecured note is still outstanding on the equipment used in the manufacturing process. Which of these items are relevant to the decision that the controller is to make? O B, C, D and E A, B, D and E O B, C and D O A, C and D

Answer rating: 100% (QA)

The first statement that tells about the equipment book value is not relev... View the full answer