Question

Wilson Co. produces tennis rackets. A customer has offered Wilson Co. $400 per unit for 200 units. To fill the order, Wilson would incur unit-level costs of $300 per unit and batch-level costs of $1,000. Wilson also incurred $10,000 of product-level costs to design the racket and $100,000 of facility-level costs. Calculate the amount of differential revenue.

Answer 1

$80,000

Step-by-step explanation:

Calculation to determine the amount of differential revenue

Using this formula

Differential revenue=Per units*Number of units

Let plug in the formula

Differential revenue=$400 x 200 units

Differential revenue= $80,000

Therefore the amount of differential revenue is $80,000