Osprey Company Is Trying to Decide Between the Following Two

Osprey Company is trying to decide between the following two alternatives: Which of the following conclusions can be drawn from this example?
$$\begin{array} { | l | r | r | } \hline & \text { Alternative A } & \text { Alternative B } \\\hline \text { Projected revenue } & \$ 50,000 & \$ 60,000 \\\hline \text { Direct material } & 6,000 & 12,000 \\\hline \text { Assembly labor } & 9,000 & 9,000 \\\hline \text { Production supervisor's salary } & 10,000 & 10,000 \\\hline\text { Facility-related costs } & 10,000 & 15,000 \\\hline \text { Profit } & \$ 15,000 & \$ 14,000 \\\hline & & \\\hline\end{array}$$

A) Variable costs are always relevant for decision making.
B) Fixed costs are sunk and thus are never relevant for decision making.
C) Relevant costs may include variable costs and fixed costs.
D) None of the above.

Correct Answer:

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