8. A basketball company is considering purchasing a new machine that doubles cap

Question

8. A basketball company is considering purchasing a new machine that doubles capacity from 100 to 200 balls per day. The machine will occupy 1,000 square feet of unused space on the factory floor. Which costs are irrelevant in this decision to purchase a machine?




A. Additional personnel required to operate the machine.

B. Rental expense associated with the 20,000 square foot factory.

C. Additional electricity required to operate the machine.

D. Maintenance cost for routine cleaning of the machine.

Explanation / Answer

B. Rental expense associated with the 20,000 square foot factory. because you are already paying rental expenses for 20,000 sq ft factory it is irrelavent in machine purchasing

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