Two Alternatives, Code-Named X and Y, Are Under Consideration at Brahler

question 33

Multiple Choice

Two alternatives, code-named X and Y, are under consideration at Brahler Corporation. Costs associated with the alternatives are listed below.



-Are the materials costs and processing costs relevant in the choice between alternatives X and Y? (Ignore the equipment rental and occupancy costs in this question.)

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

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Definitions:

Physical Capital

The tangible assets that a company uses in the production of goods or services, such as machinery, buildings, and vehicles.

Union Labor

Union labor consists of workers who are members of a labor union, which negotiates wages, work conditions, and benefits on their behalf.

Average Wages

The mean income calculated by dividing the total wage pool by the number of wage earners, used as an indicator of economic health and labor market conditions.

Profit Levels

Indicates the ranges of profit a business can generate, reflecting its financial health and operational success.