The Costs and Revenues Associated with Two Alternatives Are Listed

The costs and revenues associated with two alternatives are listed below: $$\begin{array} { | l | r | r |} \hline & \text { Alternative 1 } & \text { Alternative 2 } \\\hline \text { Projected revenue } & \$ 100,000 & \$ 125,000 \\\hline \text { Unit-level costs } & 20,000 & 30,000 \\\hline \text { Batch-level costs } & 20,000 & 25,000 \\\hline \text { Product-level costs } & 15,000 & 15,000 \\\hline \text { Facility-level costs } & 10,000 & 10,000 \\\hline\end{array}$$ 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- & 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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