Problem: Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:
Supplies costs 43000 43000
Assembly costs 43000 56000
Power costs 26000 26000
Inspection costs 19000 26000
Required to do:
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?