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Sheridan Products is considering automating its manufacturing process. Currently, the manufacturing process is handled by 5 laborers which operate the machines with annual salaries and
Sheridan Products is considering automating its manufacturing process. Currently, the manufacturing process is handled by 5 laborers which operate the machines with annual salaries and wages of $162000. Annually, direct materials used in production total $67000, manufacturing overhead associated with production totals $48000, and marketing costs of $27000, would remain the same under each option. If Sheridan automates its factory production, it will eliminate $110000 of its labor costs, but will also incur $87000 of machine leasing costs annually. Which of the following costs would be considered relevant in the decision-making framework? Marketing costs of $27000 Direct materials cost of $67000 Manufacturing overhead costs of $48000 Machine leasing costs of $87000
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