Problem
Zurasky Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below:
|
|
Alternative A
|
Alternative B
|
|
Materials costs
|
$31,000
|
$70,000
|
|
Processing costs
|
$37,000
|
$37,000
|
|
Equipment rental
|
$11,600
|
$28,800
|
|
Occupancy costs
|
$19,800
|
$28,200
|
What is the differential cost of Alternative B over Alternative A, including all of the relevant costs?