Costs associated with two alternatives, code-named Q and R, being considered by Albiston Corporation are...
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Accounting
Costs associated with two alternatives, code-named Q and R, being considered by Albiston Corporation are listed below:
| Alternative Q | Alternative R | ||||||
| Supplies costs | $ | 68,000 | $ | 68,000 | |||
| Power costs | $ | 31,500 | $ | 30,300 | |||
| Inspection costs | $ | 22,000 | $ | 30,300 | |||
| Assembly costs | $ | 36,000 | $ | 36,000 | |||
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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