Question
Costs associated with two alternatives, code-named Q and R, being considered by Corniel Corporation are listed below: Alternative Q Alternative R Supplies costs $ 49,500
Costs associated with two alternatives, code-named Q and R, being considered by Corniel Corporation are listed below: |
| Alternative Q | Alternative R | |||
| Supplies costs | $ | 49,500 | $ | 52,000 |
| Power costs | $ | 33,000 | $ | 33,000 |
| Inspection costs | $ | 13,000 | $ | 20,000 |
| Assembly costs | $ | 26,000 | $ | 15,000 |
| Required: |
| a. | Which costs are relevant and which are not relevant in the choice between these two alternatives? |
| Supplies costs | |
| Power costs | |
| Inspection costs | |
| Assembly costs | |
| b. | What is the differential cost of Alternative R over Alternative Q? (Negative amount should be indicated by a minus sign. Omit the "$" signs in your response.) |
| Differential cost | $ |
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Attorneys IRS Audit Technique Guide
Authors: Internal Revenue Service
1st Edition
1304112918, 978-1304112910
