Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below: Are the materials costs and processing costs relevant in the choice between alternatives A and B?
A) Both materials costs and processing costs are relevant
B) Neither materials costs nor processing costs are relevant
C) Only processing costs are relevant
D) Only materials costs are relevant

Question

Ouzts Corporation is considering Alternative A and Alternative B. Costs associated with the alternatives are listed below:  Are the materials costs and processing costs relevant in the choice between alternatives A and B?
A) Both materials costs and processing costs are relevant 
B) Neither materials costs nor processing costs are relevant 
C) Only processing costs are relevant 
D) Only materials costs are relevant

Quizplus · Accepted Answer

Materials costs are relevant because they differ between the alternatives. Processing costs are not relevant because they do not differ between the alternatives.

Ouzts Corporation Is Considering Alternative a and Alternative B