1. Aqua, Inc., makes statues for use in fountains. On January 1, 2008, the company paid $13,500 for a mold to make a particular type of statue. The mold had an expected useful life of four years and a salvage value of $1,500. On January 1, 2010, the mold had a market value of $3,000 and a salvage value of $1,200. The expected useful life did not change. What is the relevant cost of using the mold during 2010?
2. Addison Manufacturing Company pays a production supervisor a salary of $48,000 per year. The supervisor manages the production of sprinkler heads that are used in water irrigation systems. Should the production supervisor’s salary be considered a relevant cost to a special order decision? Should the production supervisor’s salary be considered a relevant cost to an outsourcing decision?