A company is considering the following alternatives: $$\begin{array} { l r r }
& \text { Option 1 } & \text { Option 2 } \
\text { Revenues } & \$ 330,000 & \$ 330,000 \
\text { Variable costs } & 120,000 & 98,000 \
\text { Fixed costs } & 165,000 & 165,000
\end{array}$$ 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

A company is considering the following alternatives: $$\begin{array} { l r r } 
& \text { Option 1 } & \text { Option 2 } \
\text { Revenues } & \$ 330,000 & \$ 330,000 \
\text { Variable costs } & 120,000 & 98,000 \
\text { Fixed costs } & 165,000 & 165,000
\end{array}$$ 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 are relevant in choosing between the alternatives because they differ between Option 1 and Option 2, affecting the overall profitability of each option. Revenues and fixed costs are the same for both options, so they do not influence the decision.

A Company Is Considering the Following Alternatives Which of the Following Are Relevant in Choosing Between the r