Q.8. (a) Impreza Company is considering the elimination of its Packaging Department. Management has received an offer from an outside firm to supply all Impreza's packaging needs. To help in making the decision, Impreza's Chief Executive has asked the CFO for an analysis of the cost of running Impreza's Packaging Department. Included in that analysis is Rs. 99,100 of rent, which represents the Packaging Department's allocation of the rent on Impreza's factory building. If the Packaging Department is eliminated, the space it used will be converted to storage space. Currently Impreza rents storage space in a nearby warehouse for Rs. 110,000 per year. The warehouse rental would no longer be necessary if the Packaging Department were eliminated. Required: (i) Discuss each of the amounts given in the above scenario with regard to its 10 relevance in the Department's closing decision. (ii) What type of cost is the Rs. 110,000 (Warehouse Rental), from the viewpoint of 10 the costs of the Packaging Department?