(Solved):Two alternatives, code-named X and Y, are under consideration at Afalava Corporation Costs…

 

Question

Two alternatives, code-named X and Y, are under consideration at Afalava Corporation Costs associated with the alternatives are listed below.

Alternative X Alternative Y
Materials cost $37,000 $37,000
Processing costs $38,000 $53,000
Equipment rental $12,000 $26,000
Occupancy cost $16,000 $26,000

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. Only materials costs are relevant

b. Only processing costs

Scroll to top