Question

Nesmith Corporation is considering two alternatives: A and B. Costs associated with the alternatives are listed below: Alternative AAlternative B Materials costs$26,000 $60,000 Processing costs$32,000 $32,000 Equipment rental$10,600 $28,300 Occupancy costs$19,300 $27,200 What is the differential cost of Alternative B over Alternative A, including all of the relevant costs

Answer 1

See below

Step-by-step explanation:

Alternative A. Alternative B

Material cost $26,000 $60,000

Processing costs $32,000 $32,000

Equipment rental $10,600 $28,300

Occupancy Costs $19,300 $27,200

Total expenses $87,900 $147,500

Differential cost would be;

= Material cost $34,000 + Processing cost $0 + Equipment rental $17,700 + Occupancy costs $7,900

= $59,600