Costs associated with two alternatives, code-named Q and R, being considered by
ID: 2435368 • Letter: C
Question
Costs associated with two alternatives, code-named Q and R, being considered by Lang Corporation are listed below:Alternative Q Alternative R
Supplies costs $ 63,100 $ 63,100
Power costs $ 36,400 $ 20,400
Inspection costs $ 11,500 $ 27,900
Assembly costs $ 37,900 $ 29,000
Required:
a. Which costs are relevant and which are not relevant in the choice between these two alternatives?
Supplies costs
Power costs
Inspection costs
Assembly costs
b.
What is the differential cost between the two alternatives?
Explanation / Answer
Costs associated with two alternatives, code-named Q and R, being considered by Lang Corporation are listed below: Alternative Q Alternative R Supplies costs $ 63,100 $ 63,100 Power costs $ 36,400 $ 20,400 Inspection costs $ 11,500 $ 27,900 Assembly costs $ 37,900 $ 29,000 Required: a. Which costs are relevant and which are not relevant in the choice between these two alternatives? Supplies costs NOT RELEVANT Power costs RELEVANT Inspection costs RELEVANT Assembly costs RELEVANT b. What is the differential cost between the two alternatives? $8,500