Answer:
Alternative 1 $27.7
Alternative 2 $30.25
Differential effects $2.55
Explanation:
Preparation of a differential analysis
DIFFERENTIAL ANALYSIS
Sell unfinished desks(Alternative 1 ) Process further into finished desks (Alternative 2) Differential effect (Alternative 2)
Revenue per desk $65.35 $74.50 $9.15
($74.50-$65.35=$9.15)
Cost per desk - $37.65 -$44.25 -$6.60
($37.65+$6.60=$44.25)
Profit /Loss per desk $27.7 $30.25 $2.55
($65.35 - $37.65=$27.7)
($74.50-$44.25=$30.25)
($9.15-$6.60=$2.55)
Therefore the company should process further and sell finished desks because it yields incremental Profit per desk.
I believe it is <span>b. profit
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"Factor of Production" is the force that combine to make the production of products and services possible.
Explanation:
Factor of production involves land, labor, capital, and entrepreneurship.
Land:
The important factor is that it creates major revenue through oil, gases and other possible resources which can be obtained from the land.
Labor: Starting from the person who brought bricks to build the company till the top management of the company are part of the Labor factor.
Capital: A factor which implicitly support as a factor of production. Without capital there is no chances of production or providing wages.
Entrepreneurship: These are the brainstorms who plan and create product and sits at the top level and make production and service possible.
