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

Question

Nesmith Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below: What is the differential cost of Alternative B over Alternative A. including all of the relevant costs? Tawstir Corporation has 400 obsolete personal computers that are carried in inventory at a total cost of $576,000. If these computers are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. As an alternative, the computers can be sold in their present condition for $40,000. What is the net advantage or disadvantage to the company from upgrading the computers rather than selling them in their present condition? Larance Detailing's cost formula for its materials and supplies is $1,920 per month plus $11 per vehicle. For the month of November, the company planned for activity of 87 vehicles, but the actual level of activity was 52 vehicles. The actual materials and supplies for the month was $2,130. The spending variance foe materials and supplies in November would be closest to:

Explanation / Answer

10) A B Material cost      41,000                        53,000 Processing costs      47,000                        47,000 Equipment rental      11,200                        28,600 Occupnacy costs      19,600                        30,200 Total    118,800                      158,800 Differential cost      40,000 (158800-118800) 11) 400 computers carried value    576,000 upgrade cost    100,000 sale value    160,000 benefit to upgrage      60,000 Less: sale at present condition      40,000 Net benefit of upgradation      20,000 Advantage

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