On basis of financial considerations should kessoku ltd be accepted? Highlight irrelevant costs and why irrelevant?

Outline three qualities factors that should be taken into account before making the decision of whether to buy or not to buy from kessoku ltd  

What are sunk cost and why should they be excluded from decision making? Example illustrates the concept of sunk costs?

 

Bocchi Ltd. manufactures and sells musical instruments and accessories of which Musical Tuner X is one of its product range. Currently, the company produces 9000 Musical Tuner X. The equipment used to make the Musical Tuner X is leased. Bocchi Ltd's management accountant reports the following costs for making 9000 Musical Tuner X: Direct material Direct labour Variable manufacturing overhead Equipment lease cost Fixed manufacturing overhead $210,000 $83,000 $99,000 $40,000 $90,000 Kessoku Ltd. is offering to supply Musical Tuner X to Bocchi Ltd. at $45 each. If Kessoku Ltd's offer is accented, it will mean that Bocchi Ltd. has no need to lease the equipment. The supplied Musical Tuner X will be branded and marketed under Bocchi Ltd's label.