Answer:
Two alternatives
Costs of alternatives:
The financial disadvantage of alternative y over alternative x is $28,800.
Explanation:
a) Data and Calculations:
Costs of alternatives:
alternative x alternative y
materials costs $ 45,000 $ 65,300
processing costs $ 49,400 $ 49,400
equipment rental $ 18,400 $ 18,400
occupancy costs $ 17,600 $ 26,100
Total costs $ 130,400 $ 159,200
Difference in costs = $28,800
b) The financial disadvantage of alternative y over alternative x is the increased cost incurred with alternative y over alternative x. While the total cost of alternative x is $130,400, alternative y has a total cost of $159,200, which is $28,800 more than the total costs of alternative x. The implication is that alternative y costs more than alternative x, making alternative x is a preferred alternative where cost is the determinant of the chosen option.
