Question

Grace Co. can further process Product B to produce Product C. Product B is currently selling for $21 per pound and costs $14 per pound to produce. Product C would sell for $42 per pound and would require an additional cost of $11 per pound to produce. What is the differential revenue of producing and selling Product C?a.$21 per poundb.$31 per poundc.$28 per poundd.$42 per pound

Answer 1

Differential revenue = $21 per pound

so here correct option is a.$21 per pound

Step-by-step explanation:

given data

Product B

currently selling = $21 per pound

costs = $14 per pound

Product C

sell = $42 per pound

additional cost = $11 per pound

to find out

differential revenue of producing and selling Product C

solution

we get here differential revenue that is express as

Differential revenue = selling price product C - selling price product B ..........1

put here value we get

Differential revenue = $42 - $21

Differential revenue = $21 per pound

so here correct option is a.$21 per pound