San Juan, Inc -
Are the Materials Costs and Processing Costs Differential in the Costs

Multiple Choice

San Juan, Inc. is considering two alternatives: A and B. The costs associated with the alternatives are listed below:
$$\begin{array} { l c c } & \text { Alternative A } & \text { Alternative B } \\\text { Material costs } & \$ 35,000 & \$ 57,000 \\\text { Processing costs } & 36,000 & 57,000 \\\text { Building costs } & 12,00 C & 28,000 \\\text { Equipment rental } & 19,000 & 19,00 C\end{array}$$
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Are the materials costs and processing costs differential in the choice between alternatives A and B? (Ignore the building costs and equipment rental in this question.)

A) Neither materials costs nor processing costs are differential.
B) Both materials costs and processing costs are differential.
C) Only processing costs are differential.
D) Only materials costs are differential.