Question

"Quail Co. can further process Product B to produce Product C. Product B is currently selling for $60 per pound and costs $42 per pound to produce. Product C would sell for $82 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C

Answer 1

Answer:

$22 per pound

Explanation:

The computation of the differential revenue of producing and selling Product C is shown below:

= Sale value per pound of product C - Sale value per pound of product B

= $82 per pound - $60 per pound

= $22 per pound

By subtracting the Sale value per pound of product B from the Sale value per pound of product C we can get the differential revenue and the same is shown above