Leah Friend is trying to decide which of two different kinds of candy to sell in

Question

Leah Friend 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. Friend 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 $6.00 Cost per box $7.00 Sales commission per box $1.00 Sales commission per box $1.00 Rent of Display space $1,500 Rent of display space $1,500 Advertising $3,000 Advertising $2,000 Identify each cost as being relevant or irrelevant to Ms. Friend's decision and indicate whether it is a fixed or variable relative to the number of boxes sold.

Explanation / Answer

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