Brooklyn Bakers Brooklyn Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows:
Refer to Brooklyn Bakers. The $5,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

Question

Brooklyn Bakers Brooklyn Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has technological advantages (which translate into cost savings) over the existing machine. Information on each machine follows:
 Refer to Brooklyn Bakers. The $5,000 of annual operating costs that are common to both the old and the new machine are an example of a(n)

Quizplus · Accepted Answer

The $5,000 annual operating costs that are common to both the old and new machine are irrelevant costs because they do not differ between the two options and therefore do not affect the decision of whether to keep the existing machine or purchase a new one. The decision should be based on the technological advantages and cost savings offered by the new machine compared to the existing machine.

Brooklyn Bakers Brooklyn Bakers Is Trying to Decide Whether It