Answer the following questions using the information below:
Emirate Sounds Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:

Qatar Audio Company has contacted Emirate Sounds with an offer to sell them 5,000 of the subassemblies for $22.00 each. Emirate Sounds will eliminate $25,000 of fixed overhead if it accepts the proposal.
-What are the relevant costs for Emirate Sounds?
A) $140,000
B) $80,000
C) $105,000
D) $125,000

Question

Answer the following questions using the information below:
Emirate Sounds Corporation currently manufactures a subassembly for its main product. The costs per unit are as follows:

Qatar Audio Company has contacted Emirate Sounds with an offer to sell them 5,000 of the subassemblies for $22.00 each. Emirate Sounds will eliminate $25,000 of fixed overhead if it accepts the proposal.
-What are the relevant costs for Emirate Sounds?
A) $140,000 
B) $80,000 
C) $105,000 
D) $125,000

Quizplus · Accepted Answer

Relevant costs are those that will be affected by the decision at hand. Without specific details about Emirate Sounds' situation, it's impossible to provide a precise explanation for why $105,000 is the correct answer. Generally, relevant costs could include variable costs, avoidable fixed costs, and any additional costs directly tied to a decision.

Answer the Following Questions Using the Information Below