Which of the Following Is Irrelevant When Deciding to Upgrade

question 157

Multiple Choice

Which of the following is irrelevant when deciding to upgrade a company's heating and air conditioning system?

• A) the energy efficiency of the old equipment versus the energy efficiency of the new equipment
• B) the safety of the new equipment compared to the old equipment
• C) the purchase price of the old equipment
• D) the productivity of the old equipment compared to that of the new equipment

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Definitions:

Cost Behaviour

The manner in which a cost changes in relation to changes in business activity levels.

Manufacturing Overhead

All indirect costs associated with the production process, such as the cost of utilities, maintenance, and factory equipment depreciation.

Facility Rates

Charges or costs associated with the use of facilities, such as rent, utilities, or maintenance expenses in various contexts.

Activity-based Rates

A pricing approach where rates are determined based on the activities required to produce a product or deliver a service, allocating costs more accurately.