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Two months ago, Anderson Corporation purchased 4,500 pounds of Bay at a cost of $15,300....

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Accounting

Two months ago, Anderson Corporation purchased 4,500 pounds of Bay at a cost of $15,300. The market for this product has become very strong, with the price jumping to $4.05 per pound. Because of the demand, Anderson can buy or sell Bay at this price. Anderson recently received a special order inquiry that would require the use of 4,200 pounds of Bay. In deciding whether to accept the order, management must evaluate a number of decision factors.

Without regard to income taxes, which one of the following combination of factors correctly depicts relevant and irrelevant decision factors, respectively?

Relevant Decision Factor Irrelevant Decision Factor

A. Remaining 300 pounds of Bay Market price of $4.05 per lb.

B. Market price of $4.05 per lb. Purchase price of $3.40 per lb.

C. Purchase price of $3.40 per lb. Market price of $4.05 per lb.

D. 4,500 pounds of Bay Remaining 300 pounds of Bay.

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