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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 $ 62,000 $ 59,000
Assembly costs $ 40,000 $ 40,000
Power costs $ 20,000 $ 30,500
Inspection costs $ 33,000 $ 22,000

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?

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 $ 62,000 $ 59,000
Assembly costs $ 40,000 $ 40,000
Power costs $ 20,000 $ 30,500
Inspection costs $ 33,000 $ 22,000

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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