The Costs and Revenues Associated with Two Alternatives Are Listed

The costs and revenues associated with two alternatives are listed below: $\begin{array}{lrc}&\text {Alternative 1}&\text {Alternative 2}\\\text { Projected revenue } & \$ 100,000& \$125,000 \\\text { Unit-level costs } & 20,000 & 30,000 \\\text { Batch-level costs } &20,000 & 25,000 \\\text { Croduct-level costs } &15,000 &15,000 \\\text { Tacility-level costs } &10,000 & 10,000\end{array}$ 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.

Correct Answer:

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