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Saalfrank Corporation is considering two alternatives that are code-named M and N. Costs associated with the alternatives are listed below:
| | Alternative M | | Alternative N |
| Supplies costs | $ | 55,000 | | | $ | 49,000 | |
| Assembly costs | $ | 30,000 | | | $ | 30,000 | |
| Power costs | $ | 10,000 | | | $ | 15,500 | |
| Inspection costs | $ | 23,000 | | | $ | 12,000 | |
| |
Required:
a. Which costs are relevant and which are not relevant in the choice between these two alternatives?
b. What is the differential cost between the two alternatives?
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