Solved: Differential cost between the two alternatives, Accounting Basics

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Differential cost between the two alternatives

Problem: Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:

Supplies costs      43000    43000
Assembly costs      43000    56000
Power costs           26000    26000
Inspection costs   19000    26000

Required to do:

a. Which costs are relevant and which are not relevant in the choice between these two alternatives?

b. What is the differential cost between the two alternatives?

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Accounting Basics: Differential cost between the two alternatives

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