Question

Two alternatives, code-named X and Y, are under consideration at Afalava Corporation. Costs associated with the alternatives are listed below. Alternative X Alternative Y Materials costs........ $37,000 $37,000 Processing costs...... $38,000 $53,000 Equipment rental.... $12,000 $26,000 Occupancy costs...... $16,000 $26,000 Are the materials costs and processing costs relevant in the choice between alternatives X and Y

Answer 1

Answer:

Only materials costs are relevant

Explanation:

Here in the given situation, the processing cost is only relevant and considered this represents that it helps to make the decisions.

While on the other hand, the material cost is not relevant but it would be continue for each alternative course of action

Therefore the first option is correct

The same is to be considered