Zurasky Corporation is considering two alternatives: A and B. Costs associated w

Question

Zurasky Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below: A B material costs 35,000 51,000 processing costs 41,000 41,000 equipment rental 10,000 28,000 occupancy costs 19,000 29,000 Are the materials costs and processing costs relevant in the choice between alternatives A and B? (Ignore the equipment rental and occupancy costs in this question.) #1 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 #2 What is the differential cost of Alternative B over Alternative A, including all of the relevant costs? A) $44,000 B) $149,000 C) $105,000 D) $127,000

Explanation / Answer

B) Only processing costs are relevant D) $127,000

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