Easton Company makes and sells scooters.Easton incurred the following costs in its most recent fiscal year: $\begin{array}{c}\text { Cost Items Appearing on the Income Statement }\\\begin{array}{|l|l|} \hline\text { Materials cost ( } \$ 10 \text { per unit) } & \text { Depreciation on manufacturing equipment } \\ \hline \text { Company president's salary } & \text { Salaries of administrative personnel } \\ \hline \text { Labor cost ( } \$ 4 \text { per unit) } & \text { Research and development costs } \\ \hline \text { Advertising costs }(150,000 \text { per year) } & \text { Real estate taxes on factory } \\ \hline \text { Shipping and handling (\$0.15 per unit) } & \text { Inspection costs } \\ \hline \end{array}\end{array}$ Easton can currently purchase the scooters it makes from Weston Company.If the company purchases the scooters,Easton would still continue to use its own logo,sales staff,and advertising programs.If Easton outsources the scooters to Weston,which of the following costs would be relevant to the outsourcing decision?

A) Materials cost B) Shipping and handling C) Inspection costs D) All of these answers are correct. A) Materials cost B) Shipping and handling C) Inspection costs D) All of these answers are correct.

Osprey Company is trying to decide between the following two alternatives: \[\begin{array} { l c r } &\text { Alternative A } & \text { Alternative B } \\ \text { Projected reveruse } &\$ 50,000 & \$ 60,000 \\ \text { Direct material } & 6,000 & 12,000\\ \text { Assembly labor } &9,000 & 9,000 \\ \text { Production supervisor's salary } & 10,000 & 10,000 \\ \text { Facility-related costs } &\underline{ 10,000} &\underline{ 15,000}\\ \text { Profit } & \underline{ \$ 15,000 }& \underline{ \$ 14,000}\\ \end{array}\] Which of the following conclusions can be drawn from this example?

A) Variable costs are always relevant for decision making. B) Fixed costs are sunk and thus are never relevant for decision making. C) Relevant costs may include variable costs and fixed costs. D) None of these answers are correct. A) Variable costs are always relevant for decision making. B) Fixed costs are sunk and thus are never relevant for decision making. C) Relevant costs may include variable costs and fixed costs. D) None of these answers are correct.

Jason is trying to decide which one of two job offers he will accept.Several items are presented below: \[\begin{array} { l c cc } & \text { Job Offer A } &{ \text { Job Offer B } } \\ \text { (1) Base salary } & \$ 40,000 & { \$ 40,000 } \\ \text { (2) Overtime compensation } & \text { Comp. time } & { \text { Hourly rate } } \\ \text { (3) Moving allowance } & \$ 2,000 & \$ 2,000 \\ \text { (4) Sigring bonus } & \$ 1,000 & \$ 0 \\ \text { (5) Job search costs incurred } & \$ 500 & \$ 500 \end{array}\] Which of the above items would be considered relevant costs?

A) (1), (3), (5) B) (2), (4) C) (5) D) None of these answers are correct. A) (1), (3), (5) B) (2), (4) C) (5) D) None of these answers are correct.

Easton Company makes and sells scooters.Easton incurred the following costs in its most recent fiscal year: $\begin{array}{c}\text { Cost Items Appearing on the Income Statement }\\\begin{array}{|l|l|} \hline\text { Materials cost ( } \$ 10 \text { per unit) } & \text { Depreciation on manufacturing equipment } \\ \hline \text { Company president's salary } & \text { Salaries of administrative personnel } \\ \hline \text { Labor cost ( } \$ 4 \text { per unit) } & \text { Research and development costs } \\ \hline \text { Advertising costs }(150,000 \text { per year) } & \text { Real estate taxes on factory } \\ \hline \text { Shipping and handling (\$0.15 per unit) } & \text { Inspection costs } \\ \hline \end{array}\end{array}$ Easton can currently purchase the scooters it makes from another company.If the company purchases the scooters,Easton would still continue to use its own logo,sales staff,and advertising programs.Which of the following costs would be classified as a unit-level cost?

A) Company president's salary B) Depreciation on manufacturing equipment C) Materials cost D) Real estate taxes on factory A) Company president's salary B) Depreciation on manufacturing equipment C) Materials cost D) Real estate taxes on factory