Ouzts Corporation is considering two alternatives: A and B. Costs associated with the alternatives listed below:

	Alternative A	Alternative B
Materials costs	$40,000	$56,000
Processing costs	$37,000	$37,000
Equipment rental	$13,000	$13,000
Occupancy costs	$15,000	$22,000

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.) (Points : 2)

Both materials costs and processing costs are relevant Neither materials costs nor processing costs are relevant Only processing costs are relevant Only materials costs are relevant

Mike Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 14%. In January, the Commercial Products Division had average operating assets of $970,000 and net operating income of $143,700. What was the Commercial Products Division's residual income in January? (Points : 2)

$7,900 -$20,118 $20,118 -$7,900