1. The law firm of Taylor, Taylor, and Tower has been asked to represent a local client. All legal proceedings will be held out of town in Chicago. The law firm's accountant has asked you to help determine the incremental cost of accepting this client. Classify each of the following items on the basis of their relationship to this engagement as a) relevant opportunity costs, b) relevant outlay costs, c) irrelevant outlay costs, or d) irrelevant sunk costs. i. The case will require three attorneys to stay four nights in a Chicago hotel. The predicted hotel bill is $2,400. ii. The firm has recently accepted a separate engagement that will require partners to spend two weeks in Cincinnati. The predicted out-of-pocket costs of this trip are $8,500. ii The firm has a maintenance contract on its computer equipment that will cost $2,200 next year iv. If the firm accepts the client and sends attorneys to Chicago, it will have to decline a conflicting engagement in Miami that would have provided a net cash inflow of $15,000 The firm's variable overhead is $80 per client hour Last year the firm paid $3,500 to increase the insulation in its building v. vi. 2. Gleeson manufactures a single product with the following full unit costs for 6,000 units: Direct materials Direct labor Manufacturing overhead (40% variable) Selling expenses (60% variable) Administrative expenses (10% variable) Total per unit $160 80 240 80 40 $600 A company recently approached Gleeson with a special order to purchase 1,000 units for $575. Gleeson currently sells the models to dealers for $1,100. Capacity is sufficient to produce the extra 1,000 units. No selling expenses would be incurred on the special order Determine the impact on profit of accepting the order. Should Gleeson accept the special order if its goal is to maximize short-run profits