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Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below: Alternative M Alternative N Supplies
Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:
Alternative M | Alternative N | ||||||
Supplies costs | $ | 82,000 | $ | 69,000 | |||
Assembly costs | $ | 50,000 | $ | 50,000 | |||
Power costs | $ | 30,000 | $ | 45,500 | |||
Inspection costs | $ | 43,000 | $ | 32,000 | |||
Required:
a. Which costs are relevant and which are not relevant in the choice between these two alternatives?
b. What is the differential cost between the two alternatives?
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