Question
Mccubbin Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below: Alternative A Alternative B Materials costs $35,000 $57,000
Mccubbin Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below:
| Alternative A | Alternative B |
Materials costs | $35,000 | $57,000 |
Processing costs | $36,000 | $57,000 |
Equipment rental | $12,000 | $28,000 |
Occupancy costs | $19,000 | $19,000 |
Are the materials costs and processing costs relevant in the choice between alternatives A and B? (Ignore the equipment rental and occupancy costs in this question.)
A. | Neither materials costs nor processing costs are relevant | |
B. | Both materials costs and processing costs are relevant | |
C. | Only processing costs are relevant | |
D. | Only materials costs are relevant |
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