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
