1. Company X currently has the capacity to manufacture 350,000 Standard items a year and 80,000 Deluxe items a year in its factory. Company X has the following costs related to manufacturing and selling 75,000 Deluxe items:

   1. Direct materials and direct labor	$840,000
   2. Variable manufacturing overhead	$180,000
   3. Rent on equipment only used for the Deluxe items	$40,000
   4. Allocated share of depreciation on factory	$100,000
   5. Annual salary of the Deluxe production manager	$70,000
   6. Allocated share of fixed selling costs	$80,000
   Total	$1,310,000

   Assume a customer asks Company X to manufacture a special order of 4,000 Deluxe items.

   Indicate whether the following costs from the list above are relevant or not relevant for this special order decision.

   For a relevant cost, Type R in the answer box. (Just the R, please) For a cost that is not relevant, Type NR in the answer box. (Just the NR, please)

   Cost 1, Direct materials and direct labor . Cost 2, variable manufacturing overhead Cost 3, rent on equipment used only for the Deluxe items. Cost 4, allocated share of depreciation on factory Cost 5, annual salary of Deluxe production manager Cost 6, allocated share of fixed selling costs