Costs associated with two alternatives, code-named Q and R, being considered by
ID: 2529783 • Letter: C
Question
Costs associated with two alternatives, code-named Q and R, being considered by Albiston Corporation are listed below Alternative Q Alternative R Supplies costs Power costs Inspection costs Assembly costs $70,800 $32,408 $24,000 $37,000 $76,080 $31,280 $31,280 $37,800 Required a Which costs are relevant and which are not relevant in the cholce between these two altematives? b. What is the differential cost between the two alternatives? a Supplies costs Power inspection costs Assembly costs costs b. Differential costExplanation / Answer
Part A:
Supplies Costs = Relevant
Power Costs = Not Relevant
Inspection Costs = Relevant
Assembly Costs = Relevant
Part B
Alternative Q
Alternative R
Differential
Supplies Costs
70000
70000
0
Power Costs
32400
31200
-1200
Inspection Costs
24000
31200
7200
Assembly Costs
37000
37000
0
Total
163400
169400
6000
Alternative Q
Alternative R
Differential
Supplies Costs
70000
70000
0
Power Costs
32400
31200
-1200
Inspection Costs
24000
31200
7200
Assembly Costs
37000
37000
0
Total
163400
169400
6000