Fusion Metals Company is considering the elimination of its Packaging Department. Management has received an offer from an outside firm to supply all Fusions packaging needs. To help her in making the decision, Fusions president has asked the controller for an analysis of the cost of running Fusions Packaging Department. Included in that analysis is $9,100 of rent, which represents the Packaging Departments allocation of the rent on Fusions factory building. If the Packaging Department is eliminated, the space it used will be converted to storage space. Currently Fusion rents storage space in a nearby warehouse for $11,000 per year. The warehouse rental would no longer be necessary if the Packaging Department were eliminated.

Required:

Identify the relevance of each of the figures given in the exercise with regard to the department-closing decision.

Allocation of rent on factory building
Rental of storage space in warehouse