Osprey Company is trying to decide between the following two alternatives: Alternative A Alternative BProjected revenue$50,000 $60,000 Direct material 6,000 12,000 Assembly labor 9,000 9,000 Production supervisor's salary 10,000 10,000 Facility-related costs 10,000 15,000 Profit$15,000 $14,000 Which of the following conclusions can be drawn from this example?
A. Relevant costs may include variable costs and fixed costs.
B. Fixed costs are sunk and thus are never relevant for decision making.
C. Variable costs are always relevant for decision making.
D. None of the above.
Answer: A
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