Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below. Are the materials costs and processing costs relevant in the choice between alternatives X and Y?
A) Neither materials costs nor processing costs are relevant
B) Only processing costs are relevant
C) Only materials costs are relevant
D) Both materials costs and processing costs are relevant

Question

Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below.  Are the materials costs and processing costs relevant in the choice between alternatives X and Y?
A) Neither materials costs nor processing costs are relevant 
B) Only processing costs are relevant 
C) Only materials costs are relevant 
D) Both materials costs and processing costs are relevant

Quizplus · Accepted Answer

The materials costs do differ between the alternatives and hence are relevant. The processing costs do not differ between the alternatives and hence are not relevant.

Two Alternatives, Code-Named X and Y, Are Under Consideration at Guyer