Couch Company can produce either product A or product B. - 5280

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  • Posted on: Fri 30 Mar, 2012
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Request Description

Couch Company can produce either product A or product B. If Couch Company produces product A, expected direct material cost would be $24,000. If Couch Company produces product B, expected direct material cost would be $24,000. In choosing between these alternatives, the $24,000 direct material cost is _____. 

a.     relevant because it is an expected future cost 

b.     relevant because it is a product cost 

c.     irrelevant because it is an estimated cost 

d.     irrelevant because it does not differ between alternatives 

 
Solution Description

Couch Company can produce either product A or product B. If Couch Company produces product A, expected direct material cost would be $24,000. If Couch Company produces p