Question

Pheasant Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Product C

Answer 1

differential cost of producing product C = $24 per pound

Step-by-step explanation:

given data

B currently selling = $30 per pound

produce cost = $28 per pound

C would sell = $60 per pound

produce additional cost = $24 per pound

to find out

What is the differential cost of producing Product C

solution

we get differential cost of producing product C is express as

differential cost of producing product C = cost of (B+C) - cost of B .............1

put here value we get

differential cost of producing product C = (28+24) - 28

differential cost of producing product C = $24 per pound