Question
Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below. Alternative X Alternative Y Materials
Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below.
| Alternative X | Alternative Y |
Materials costs | $41,000 | $59,000 |
Processing costs | $45,000 | $45,000 |
Equipment rental | $17,000 | $17,000 |
Occupancy costs | $16,000 | $24,000 |
Are the materials costs and processing costs relevant in the choice between alternatives X and Y? (Ignore the equipment rental and occupancy costs in this question.)
A) Neither materials costs nor processing costs are relevant | ||
B) Only processing costs are relevant | ||
C) Only materials costs are relevant | ||
D) Both materials costs and processing costs are relevant |
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