Question

ouzts corporation is considering alternative a and alternative b. costs associated with the alternatives are listed below: alternative a alternative b materials costs $ 43,000 $ 59,700 processing costs $ 39,700 $ 39,700 equipment rental $ 13,900 $ 13,900 occupancy costs $ 16,000 $ 23,500 what is the financial advantage (disadvantage) of alternative b over alternative a? multiple choice $(124,700) $112,600 $(24,200) $136,800

Answer 1

The financial disadvantage of Alternative B compared to Alternative A is $24,200, calculated by comparing the total costs of each alternative.

Step-by-step explanation:

The question involves calculating the financial advantage or disadvantage of Alternative B over Alternative A for Ouzts Corporation. To do this, we need to compare the total costs of both alternatives. The total cost of each alternative is the sum of materials costs, processing costs, equipment rental, and occupancy costs.

• Alternative A Total Cost = $43,000 + $39,700 + $13,900 + $16,000 = $112,600
• Alternative B Total Cost = $59,700 + $39,700 + $13,900 + $23,500 = $136,800

The financial advantage (disadvantage) of Alternative B over Alternative A is calculated by subtracting the total cost of Alternative A from the total cost of Alternative B:

$136,800 (Alternative B) - $112,600 (Alternative A) = $24,200 disadvantage. Therefore, Alternative B is more expensive by $24,200.