Specik, Inc.is considering the following alternatives: $\begin{array}{lll}
&\underline{\text {Alternative1}}&
\underline{\text {Alternative2}}\
\text { Revenues } & \$ 120,000 & \$ 120,000 \
\text { Variable costs } & 60,000 & 65,000 \
\text { Fixed costs } & 35,000 & 39,000
\end{array}$ Which of the following are relevant in choosing between the alternatives?
A)variable costs
B)revenues
C)fixed costs
D)variable costs and fixed costs

Question

Specik, Inc.is considering the following alternatives: $\begin{array}{lll}
 &\underline{\text {Alternative1}}&
 \underline{\text {Alternative2}}\
\text { Revenues } & \$ 120,000 & \$ 120,000 \
\text { Variable costs } & 60,000 & 65,000 \
\text { Fixed costs } & 35,000 & 39,000
\end{array}$ Which of the following are relevant in choosing between the alternatives?
A)variable costs
B)revenues
C)fixed costs
D)variable costs and fixed costs

Quizplus · Accepted Answer

Variable costs and fixed costs are both relevant in choosing between alternatives because they both affect the overall cost structure of the company. Revenues are also important, but without considering the associated costs, it is difficult to determine the profitability of each alternative.

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