A company that produces three products, M, N, and O,

A company that produces three products, M, N, and O, is evaluating a proposal that will result in doubling the production of N and discontinuing the production of O. The facilities currently used to produce O will be devoted to the production of N. Furthermore, additional machinery will be acquired to produce N. The production of M will not be affected. All products have a positive contribution margin.

Required
Presented below are a number of phrases related to the proposal followed by a list of cost terms. For each phrase, select the most appropriate cost term. Each term is used only once.
Phrases
l. Increased revenues from the sale of N
2. Increased variable costs of N
3. Property taxes on the new machinery
4. Revenues from the sale of M
5. Cost of the equipment used to produce O
6. Contribution margin of O
7. Variable costs of M
8. Company president's salary
Cost terms
a. Opportunity cost
b. Sunk cost
c. Irrelevant variable outlay cost
d. Irrelevant fixed outlay cost
e. Relevant variable outlay cost
f. Relevant fixed outlay cost
g. Relevant revenues
h. Irrelevant revenues



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