The following costs relate to a variety of decision settings:

Cost Decisions

1 Allocated corporate overhead Closing a money-losing department

2 Cost of an old car Vehicle replacement

3 Direct Materials Make or buy a product

4 Salary of marketing manager Project discontinuance; manager to be

transferred elsewhere in the firm

5 Home theater installion Purchase of a new home

6 Unavvoidable fixed overhead Plant closure

7 Research expenditures incurred last Product introduction to maketplace

year, related to new product

8 $4 million advertising program Whether to promote product A or B with

the $4 million program.

9 Manufactured cost of existing inventory Whether to discard the goods or sell them

to a thirdworld country.

Required:

Consider each of the nine costs listed and determine whether it is relevant or irrelevant to the decision cited. If the cost is irrelevant, briefly explain why.