Gayla Ojeda is trying to decide which of two different kinds of candy to sell in her retail candy store. One type is a name-brand candy that will practically sell itself. The other candy is cheaper to purchase but does not carry an identifiable brand name. Ms. Ojeda believes that she will have to incur significant advertising costs to sell this candy. Several cost items for the two types of candy are as follows: Brandless Candy Name-Brand Candy Cost per box Sales commissions per box Rent of display space Advertising 4.00 1.00 900.00 3,000.00 Cost items Cost per box Sales commissions per box Rent of display space Advertising Required Identify each cost as being relevant or irrelevant to Ms. Ojeda's decision and indicate whether it is fixed or variable relative to the number of boxes sold. Cost per box Sales commissions per box Rent of display space Advertising Relevance Behavior
Gayla Ojeda is trying to decide which of two different kinds of candy to sell in her retail candy store. One type is a name-brand candy that will practically sell itself. The other candy is cheaper to purchase but does not carry an identifiable brand name. Ms. Ojeda believes that she will have to incur significant advertising costs to sell this candy. Several cost items for the two types of candy are as follows: Brandless Candy Name-Brand Candy Cost per box Sales commissions per box Rent of display space Advertising 4.00 1.00 900.00 3,000.00 Cost items Cost per box Sales commissions per box Rent of display space Advertising Required Identify each cost as being relevant or irrelevant to Ms. Ojeda's decision and indicate whether it is fixed or variable relative to the number of boxes sold. Cost per box Sales commissions per box Rent of display space Advertising Relevance Behavior
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 1TP: Seda Sarkisian makes wedding cakes from her home. A customer has requested two duplicate wedding...
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Gayla Ojeda is trying to decide which of two different kinds of candy to sell in her
retail candy store. One type is a name-brand candy that will practically sell itself.
The other candy is cheaper to purchase but does not carry an identifiable brand
name. Ms. Ojeda believes that she will have to incur significant advertising costs to
sell this candy. Several cost items for the two types of candy are as follows:
Brandless Candy
Name-Brand Candy
Cost per box
Sales commissions per box
Rent of display space
Advertising
$
Cost items
Cost per box
Sales commissions per box
Rent of display space
Advertising
4.00
1.00
900.00
3,000.00
Required
Identify each cost as being relevant or irrelevant to Ms. Ojeda's decision and
indicate whether it is fixed or variable relative to the number of boxes sold.
Cost per box
Sales commissions per box
Rent of display space
Advertising
Relevance
Behavior
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