San Juan, Inc -
Are the Materials Costs and Processing Costs Differential in the Costs

question 35

Multiple Choice

San Juan, Inc. is considering two alternatives: A and B. The costs associated with the alternatives are listed below:
$$\begin{array} { l c c } & \text { Alternative A } & \text { Alternative B } \\\text { Material costs } & \$ 35,000 & \$ 57,000 \\\text { Processing costs } & 36,000 & 57,000 \\\text { Building costs } & 12,00 C & 28,000 \\\text { Equipment rental } & 19,000 & 19,00 C\end{array}$$
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Are the materials costs and processing costs differential in the choice between alternatives A and B? (Ignore the building costs and equipment rental in this question.)

• A) Neither materials costs nor processing costs are differential.
• B) Both materials costs and processing costs are differential.
• C) Only processing costs are differential.
• D) Only materials costs are differential.

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Definitions:

Managers Build

The process by which managers create or enhance structures, teams, and relationships within organizations to achieve goals and improve performance.

External Adaptation

Refers to how organizations adjust and respond to changes in their external environment to ensure survival and growth.

Internal Integration

The process within organizations of combining and coordinating the efforts and resources of different departments or units to achieve unity of effort and consistent objectives.

Radical Product Innovation

The creation of products with groundbreaking technologies or novel features that significantly differentiate them from existing products.