The costs listed below relate to a variety of different decision situations. For each cost listed below, indicate if it is relevant or not to the related decision.

Cost Decision Relevant/Irrelevant
1. Unavoidable fixed overhead Eliminate an unprofitable segment
2. Direct labor Make or buy
3. Original cost of old equipment Equipment replacement
4. Joint production costs Sell or process further
5. Opportunity cost Accepting a special order
6. Segment manager’s salary Eliminate an unprofitable segment (manager will be terminated)
7. Cost of new equipment Equipment replacement
8. Incremental production costs Sell or process further
9. Direct materials Equipment replacement (the amount of materials required does not change)
10. Rent expense Purchase or lease a building

Please Refer to Explanation

Explanation:

1. Unavoidable fixed overhead - Eliminate an unprofitable segment. IRRELEVANT.

It is a fixed overhead so it will still occur regardless.

2. Direct labor - Make or buy. RELEVANT. Buying can reduce the direct labour involved in making.

3. Original cost of old equipment - Equipment replacement. IRRELEVANT. It occured in the past and does not matter anymore.

4. Joint production costs - Sell or process further. IRRELEVANT.

5. Opportunity cost - Accepting a special order. RELEVANT.

Can increase cost in business.

6. Segment manager’s salary - Eliminate an unprofitable segment (manager will be terminated). RELEVANT as it eliminating Segment will remove manager's salary.

7. Cost of new equipment - Equipment replacement. RELEVANT because the the cost of the new Equipment determines if we can afford to replace the old one.

8. Incremental production costs - Sell or process further. RELEVANT because incremental costs only apply if product is processed further.

9. Direct materials - Equipment replacement (the amount of materials required does not change). IRRELEVANT if the number of materials required does not change.

10. Rent expense - Purchase or lease a building. RELEVANT because the rent expense only applies if the building is leased.

steering wheels are always situated on the left side of the car.

always drive on the right side of the road.

white lines separate lanes of traffic traveling the same direction.

hashed or broken lines means you may change lanes when it is safe.

solid white lines mean stay in your lane.

yellow lines separate traffic moving in opposing directions.

hashed or broken yellow lines mean you can carefully pass, paying attention to oncoming traffic.

never cross a solid yellow line (or double yellow line).

when turning left at an intersection, pass in front of any cars that are turning left from the opposing direction (do not try to pass behind them).

use the left lane to pass other cars traveling your direction.

do not pass in the right lane unless absolutely necessary.

if you are driving in the far left hand lane and someone would like to pass you, move over to the right lane when it is safe to do so and allow them to pass.

you must always yield to pedestrians.

come to a complete stop whenever you see pedestrians trying to cross the street.

never pass a school bus if it has flashing red lights. wait until the lights have stopped.

be aware of bicyclists. often they share the road with cars and are supposed to also follow general traffic laws.

be particularly careful about driving in cities with bike lanes -- always check before turning that a bike is not coming.

it is mandatory to pull over or stop at an intersection to allow an emergency vehicle to pass you if you see one traveling with lights flashing and/or a siren running.

do not overuse your car horn. horns are used almost exclusively for emergency situations or for when you feel unsafe.

explanation: