Question

An unfinished desk is produced for $35.65 and sold for $64.20. A finished desk can be sold for $76.00. The additional processing cost to complete the finished desk is $6.15. Provide a differential analysis for further processing. Round your answers to two decimal places, if necessary. Differential revenue from further processing:
Revenue per unfinished desk $___________
Revenue per finished desk _______________
Differential revenue $____________
Differential cost per desk:
Additional cost for producing ___________
Differential from further processing __________

Answer 1

Answer:

Differential revenue from further processing:

= $11.80.

Explanation:

a) Data and Calculations:

Cost of production of an unfinished desk = $35.65

Selling price of an unfinished desk = $64.20

Selling price of a finished desk = $76.00

Additional processing cost = $6.15

Revenue per finished desk    $76.00

Revenue per unfinished desk 64.20

Differential revenue                $11.80

Differential cost per desk:

Cost of unfinished desk       $35.65

Additional cost for producing   6.15

Differential from further processing $41.80

                                     Unfinished     Finished       Differential

Revenue                          $64.20         $76.00           $11.80

Cost of production          (35.65)           (41.80)             (6.15)

Net income                     $28.55         $34.20            $5.65