Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are below. Supplies costs Assembly costs Power costs Inspection costs a Supplies costs a Assembly costs a Power costs Alternative M Alternative N $ 68,000 $ 77,000 $ 49,000 $ 49,000 $ 44,000 $ 31,000 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? a Inspection costs b. Differential cost $ 29,000 $ 42,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question

Subject: accounting 

Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are
below:
Supplies costs
Assembly costs
Power costs
Inspection costs
a Supplies costs
a Assembly costs
a Power costs
Alternative M Alternative N
$ 77,000
$ 49,000
$ 29,000
$ 42,000
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?
a Inspection costs
b. Differential cost
$ 68,000
$ 49,000
$ 44,000
$ 31,000
Transcribed Image Text:Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are below: Supplies costs Assembly costs Power costs Inspection costs a Supplies costs a Assembly costs a Power costs Alternative M Alternative N $ 77,000 $ 49,000 $ 29,000 $ 42,000 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? a Inspection costs b. Differential cost $ 68,000 $ 49,000 $ 44,000 $ 31,000
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