Reference no: EM13577693

Costs associated with two alternatives, code-named Q and R, being considered by Corniel Corporation are listed below:

	Alternative Q		Alternative R
Supplies costs	$	77,000	$	68,000
Power costs	$	49,000	$	49,000
Inspection costs	$	29,000	$	44,000
Assembly costs	$	42,000	$	31,000

Required:

a.	Which costs are relevant and which are not relevant in the choice between these two alternatives?

Supplies costs
Power costs
Inspection costs
Assembly costs

b.	What is the differential cost of Alternative R over Alternative Q?

Differential cost

$

Part 5--------------------------------------------------

Silmon Corporation makes a product with the following standard costs:

Inputs	Standard Quantity or Hours		Standard Price or Rate
Direct materials	4.3	grams	$	7.00	per gram
Direct labor	0.5	hours	$	14.00	per hour
Variable overhead	0.5	hours	$	4.00	per hour

In June the company produced 4,800 units using 21,890 grams of the direct material and 2,520 direct labor-hours. During the month the company purchased 24,700 grams of the direct material at a price of $6.80 per gram. If materials used are more than the materials purchased, the additional amount is taken from inventory.

The actual direct labor rate was $14.60 per hour and the actual variable overhead rate was $3.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.