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  3. value: 1.14 points castro company makes and sells

value: 1.14 points Castro Company makes and sells a single product. Castro incurred the following...

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Accounting

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value: 1.14 points Castro Company makes and sells a single product. Castro incurred the following costs in its most recent fiscal year. Cost Items Appearing on the Income Statement Sales commissions (1.50% of sales) Salaries of administrative personnel Materials cost ($9 per unit) Company president's salary Depreciation on manufacturing equipment Shipping and handling ($0.50 per unit) Customer billing costs (1% of sales) Rental cost of manufacturing facility Advertising costs ($200,000 per year)Production supervisor's salary Labor cost ($8 per unit) Depreciation on office furniture Manufacturing supplies ($0.25 per unit) Castro could purchase the products that it currently makes. If it purchased the items, the company would continue to sell them using its own logo, advertising program, and sales staf. Required Identify each cost as relevant or irrelevant to the outsourcing decision and indicate whether the cost is fixed or variable relative to the number of products manufactured and sold. Cost Items Relevance Behavior Materials cost ($9 per unit) Company president's salary

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