Costs associated with two alternatives, code-named Q and R, being considered by Albiston Corporation are listed below:
- alternative Q alternative R
- Supplies costs 65,000 65,000
- power cost 30,000 29,000
- inspection cost 18,000 29,000
- assembly cost 33,000 33,000
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?