Cherry, Inc., currently has a machine that costs $50,000 per year to operate. The machine can produce 60,000 units per year. Two years ago, the company borrowed $450,000 to purchase the machine; it still owes $325,000 of that amount. Cherry could sell the machine for $295,000 and purchase a new, more efficient machine at a cost of $480,000. The new machine can produce 85,000 units per year; its annual operating costs would be $55,000. Indicate whether each piece of information in this scenario is relevant or irrelevant to the decision to purchase the new machine. Operating cost of old machine Production of old machine Relevant Irrelevant Purchase price of old machine Loan balance Market value of old machine Cost of new machine Production of new machine Operating cost of new machine View Policies Current Attempt in Progress Pina Colada Company is a leading manufacturer of sunglasses. One of Pina Colada's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Pina Colada about purchasing 29,300 pairs of these sunglasses. Pina Colada's unit manufacturing cost, based on a full capacity of 248,000 units, is as follows: $7 5 Direct materials Direct labor Manufacturing overhead (75% fixed) Total manufacturing costs 25 $37 Pina Colada also incurs selling and administrative expenses of $74,800 plus $3 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Pina Colada's normal price for these sunglasses is $42 per pair. The sporting goods store has offered to pay $32 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Pina Colada's income if the special order were accepted? Pina Colada's income will by $ decrease increase