The Costs and Revenues Associated with Two Alternatives Are Listed

question 74

Multiple Choice

The costs and revenues associated with two alternatives are listed below: $$\begin{array} { l r r } & \text { Alternative } 1 & \text { Alternative } 2 \\\text { Projected reveruse } & \$ 100,000 & \$ 125,000 \\\text { Unit-level costs } & 20,000 & 30,000 \\\text { Batch-level costs } & 20,000 & 25,000 \\\text { Product-level costs } & 15,000 & 15,000 \\\text { Facility-level costs } & 10,000 & 10,000\end{array}$$ Which alternative should be selected based on this information?

• A) Alternative 2 because it has a higher profit.
• B) Alternative 2 because it has the same product- and facility-level costs.
• C) Alternative 1 because it has fewer unit-level costs.
• D) Alternative 1 because it has a higher profit.

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