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Differential cost between the two alternatives.
Saalfrank Corp. is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:
Alternative M
Alternative N
Supplies cost
$43,000
$53,000
Assembly cost
$56,000
Power cost
$26,000
Inspection cost
$19,000
Which costs are relevant and which are not relevant in the choice between these two alternatives?
What is the differential cost between the two alternatives?
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Example on Inventory Valuation
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