Question - Sea Island Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below:
|
|
Alternative A
|
Alternative B
|
|
Projected revenue
|
$255,000
|
$390,000
|
|
Unit-level costs
|
49,000
|
60,000
|
|
Batch-level costs
|
36,500
|
48,000
|
|
Product-level costs
|
39,000
|
41,000
|
|
Facility-level costs
|
34,000
|
36,500
|
What is the differential revenue for this decision?
$160,000
$255,000
$135,000
$390,000