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The Johnny Pickles Brewing Company is considering adding a new piece of equipment to the beer making process. No additional space will be required if the new equipment is added. The equipment will result in an increase in production as well as improvement in quality that should allow the brewery to increase the price it charges for its premium beers. Determine if the items below are relevant to the decision to add additional equipment.

Consideration	Relevant/Irrelevant
Rent on the building where the beer is made. No additional space required.	[ Select ] ["Relevant", "Irrelevant"]
The amount the brewery spends on raw materials	[ Select ] ["Relevant", "Irrelevant"]
The top line sales revenue for the brewery	[ Select ] ["Irrelevant", "Relevant"]
The cost of the new equipment	[ Select ] ["Irrelevant", "Relevant"]
The future salvage of the existing equipment	[ Select ] ["Irrelevant", "Relevant"]

With respect to pricing, when a company offers a unique, in demand product, it is most likely a [ Select ] ["Cost Plus", "Target Pricing", "Price Taker", "Market Leader", "Price Setter"] and it will most likely target a [ Select ] ["Cost Plus", "Price Setter", "Market Leader", "Price Taker", "Target Pricing"] model for setting its price. Conversely, when a company offers a relatively undifferentiated product with relatively average demand it would most likely be considered a [ Select ] ["Target Pricing", "Market Leader", "Price Taker", "Price Setter", "Cost Plus"] and would utilize a [ Select ] ["Market Leader", "Price Setter", "Cost Plus", "Price Taker", "Target Pricing"] model for setting the price of its products.

The income statement for Bauer Online Real Estate Training is presented below. The management team at the real estate training company is not pleased with the performance of their residential real estate training line and is considering dropping it. A cost study of the residential training line has revealed that $42794 of the Selling and $33028 of the Administrative fixed expenses cannot be avoided if the residential real estate training line is dropped. If the management at Bauer Online Real Estate Training decides to drop the line, what will the new company net income be? Calculate your answer to the nearest whole dollar.

	Total	Residential	Commercial
Sales Revenue	$527000	$185000	$342000
Variable Costs	112000	34000	78000
Contribution Margin	415000	151000	264000
Fixed Costs:
Selling	185000	88000	97000
Administrative	203000	94000	109000
Total Fixed Expenses	388000	182000	206000
Operating Income (Loss)	$27000	$(31000)	$58000

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