For the Past 12 Years,the Blue Company Has Produced the Small

Multiple Choice

For the past 12 years,the Blue Company has produced the small electric motors that fit into its main product line of dental drilling equipment.As material costs have steadily increased,the controller of the Blue Company is reviewing the decision to continue to make the small motors and has identified the following facts:
(1) The equipment used to manufacture the electric motors has a book value of $150,000.
(2) The space now occupied by the electric motor manufacturing department could be used to eliminate the need for storage space now being rented.
(3) Comparable units can be purchased from an outside supplier for $59.75.
(4) Four of those who work in the electric motor manufacturing department would be terminated and given eight weeks' severance pay.
(5) A $10,000 unsecured note is still outstanding on the equipment used in the manufacturing process.Which of the items above are relevant to the decision that the controller has to make?

A) 1,3,and 4.
B) 2,3,and 4.
C) 2,3,4,and 5.
D) 1,2,4,and 5.