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The Costs and Revenues Associated with Two Alternatives Are Listed

Question 21

Multiple Choice

The costs and revenues associated with two alternatives are listed below:  Alternative 1 Alternative 2 Projected reveruse $100,000$125,000 Unit-level costs 20,00030,000 Batch-level costs 20,00025,000 Product-level costs 15,00015,000 Facility-level costs 10,00010,000\begin{array} { l r r } & \text { Alternative } 1 & \text { Alternative } 2 \\\text { Projected reveruse } & \$ 100,000 & \$ 125,000 \\\text { Unit-level costs } & 20,000 & 30,000 \\\text { Batch-level costs } & 20,000 & 25,000 \\\text { Product-level costs } & 15,000 & 15,000 \\\text { Facility-level costs } & 10,000 & 10,000\end{array} Which alternative should be selected based on this information?


A) Alternative 2 because it has a higher profit.
B) Alternative 2 because it has the same product- and facility-level costs.
C) Alternative 1 because it has fewer unit-level costs.
D) Alternative 1 because it has a higher profit.

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