1. The selling price per pound of JP-1 is relevant to the decision, because this is the revenue that the company would be receiving if they discontinue processing JP-1 further. 2. The total hourly direct labor cost in Department 3 is relevant to the decision, because these are costs that the company will no longer have if they discontinue processing JP-1 further. 3. Unit marketing and packaging costs for BP-2, the byproduct, are relevant to the decision, because these costs will go away if they discontinue processing JP-1 further. 4. Supervisory salaries of Department 3 personnel who will be transferred elsewhere in the plant, if processing is terminated are not relevant to the decision, because they will not change regardless of what decision is made. 5. Department 2 joint cost allocated to JP-1 and transferred to Department 3 is not relevant to the decision, because it will not change regardless of what decision is made. 6. The cost of existing JP-1R inventory is not relevant to the decision, because that is a sunk cost that has already been incurred, and it will not be changed by the decision.
1. The selling price per pound of JP-1 is relevant to the decision, because this is the revenue that the company would be receiving if they discontinue processing JP-1 further. 2. The total hourly direct labor cost in Department 3 is relevant to the decision, because these are costs that the company will no longer have if they discontinue processing JP-1 further. 3. Unit marketing and packaging costs for BP-2, the byproduct, are relevant to the decision, because these costs will go away if they discontinue processing JP-1 further. 4. Supervisory salaries of Department 3 personnel who will be transferred elsewhere in the plant, if processing is terminated are not relevant to the decision, because they will not change regardless of what decision is made. 5. Department 2 joint cost allocated to JP-1 and transferred to Department 3 is not relevant to the decision, because it will not change regardless of what decision is made. 6. The cost of existing JP-1R inventory is not relevant to the decision, because that is a sunk cost that has already been incurred, and it will not be changed by the decision.
1. The selling price per pound of JP-1 is relevant to the decision, because this is the revenue that the company would be receiving if they discontinue processing JP-1 further. 2. The total hourly direct labor cost in Department 3 is relevant to the decision, because these are costs that the company will no longer have if they discontinue processing JP-1 further. 3. Unit marketing and packaging costs for BP-2, the byproduct, are relevant to the decision, because these costs will go away if they discontinue processing JP-1 further. 4. Supervisory salaries of Department 3 personnel who will be transferred elsewhere in the plant, if processing is terminated are not relevant to the decision, because they will not change regardless of what decision is made. 5. Department 2 joint cost allocated to JP-1 and transferred to Department 3 is not relevant to the decision, because it will not change regardless of what decision is made. 6. The cost of existing JP-1R inventory is not relevant to the decision, because that is a sunk cost that has already been incurred, and it will not be changed by the decision.
1. The selling price per pound of JP-1 is relevant to the decision, because this is the revenue that the company would be receiving if they discontinue processing JP-1 further. 2. The total hourly direct labor cost in Department 3 is relevant to the decision, because these are costs that the company will no longer have if they discontinue processing JP-1 further. 3. Unit marketing and packaging costs for BP-2, the byproduct, are relevant to the decision, because these costs will go away if they discontinue processing JP-1 further. 4. Supervisory salaries of Department 3 personnel who will be transferred elsewhere in the plant, if processing is terminated are not relevant to the decision, because they will not change regardless of what decision is made. 5. Department 2 joint cost allocated to JP-1 and transferred to Department 3 is not relevant to the decision, because it will not change regardless of what decision is made. 6. The cost of existing JP-1R inventory is not relevant to the decision, because that is a sunk cost that has already been incurred, and it will not be changed by the decision.
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