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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 | $ | 72,000 | $ | 64,000 | |||
| Assembly costs | $ | 45,000 | $ | 45,000 | |||
| Power costs | $ | 25,000 | $ | 38,000 | |||
| Inspection costs | $ | 38,000 | $ | 27,000 | |||
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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