QUESTION 7 The costs are the costs of producing one more unit. costs are forecasted; used for control and evaluation. Differential. Relevant Incremental. Standard. Standard. Incremental. Relevant. Differential Opportunity. Discretionary. QUESTION 8 The Pub is considering replacing the current dishwasher with a new energy efficient model. Although the current dishwasher has a book value of $2,500, its market value is only $2,000. Additionally, if the current dishwasher is held for five more years, its future value will drop to $1,000. Lastly, if they decide not to buy a NEW dishwasher, approximately $500 of repairs must be performed now on the current dishwasher. The following is a schedule of expected annual expenses over the next five years for each option. Keep current dishwasher Buy NEW dishwasher Maintenance $ 600 $ 500 Labor $8,000 $8,000 Energy $ 800 $ 600 Water $ 400 $ 400 The NEW dishwasher would cost $8,000 and is expected to have a salvage value of $4,000 at the end of five years. Which costs are not relevant? The current book value of the current dishwasher: $2,500; the annual costs for labor and the annual costs for water. The future book value of the current dishwasher: $1,000. The cost of the NEW dishwasher: $8,000. The cost of repairs for the current dishwasher: $500. QUESTION 9 To properly complete the calculations for the previous problem which of the following must be included: The salvage value today for the old dishwasher and the salvage value in five years for the old dishwasher. The total costs for five years for Maintenance and Energy. The repair costs for the old dishwasher and the purchase price of the NEW dishwasher. The salvage value in five years for the NEW dishwasher. O All of the above. QUESTION 10 Use the information in the previous two questions above. Based on your calculations should the owners purchase the NEW dishwasher? Yes, because the estimated costs are lower for the NEW dishwasher. O Yes, because the estimated costs are higher for the NEW dishwasher. No, because the estimated costs are lower for the old dishwasher O No, because the estimated costs are higher for the old dishwasher