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Which of the following costs for a proposed project are relevant? a) The salary to be paid to a market researcher who will oversee the
Which of the following costs for a proposed project are relevant? a) The salary to be paid to a market researcher who will oversee the development of a ne project. This is a new post to be created especially for the new product but the $12,000 will be a fixed cost. Is this cost relevant to the decision to proceed with the development of the product? b) The $2,500 additional monthly running costs o a new machine to be purchased to manufacture an established product. Since the new machine will save on labour time, the fixed overhead to be absorbed by the product will reduce by $100 per month. Are these costs relevant to the decision to purchase the new machine? c) Office cleaning expenses of $125 for next month. The office is cleaned by contractors and the contract can be cancelled by giving 1 months' notice. Is this cost relevant to a decision to close the office? d) Expenses of $75 paid to the marketing manager. This was to reimburse the manager for the cost of traveling to meet a client with whom the company is currently negotiating a major contract. Is this cost relevant to the decision to continue negotiations
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