Based on the segment income statement below, Sorbet is considering eliminating its Mango line.
|
Revenue from Mango sales
|
$500,000
|
|
Salaries for Mango workers
|
(100,000)
|
|
Direct material
|
(300,000)
|
|
Sunk costs (equipment depreciation)
|
(75,000)
|
|
Allocated company-wide facility-sustaining costs
|
(50,000)
|
|
Net loss
|
$ (25,000)
|
Required:
Identify each cost as being relevant or not relevant in this decision.