Question

Grace Co. can further process Product B to produce Product C. Product B is currently selling for $19 per pound and costs $15 per pound to produce. Product C would sell for $40 per pound and would require an additional cost of $8 per pound to produce. The differential revenue of producing and selling Product C is

Answer 1

$21

Step-by-step explanation:

Differential cost can be defined as the difference between the cost of two alternative decisions, or of a change in output levels. In the given question to produce the product, additional costs are $21 which is said to be the additional cost.

$40-$19 =$21

The differential revenue of producing and selling Product C is $21

Answer 2

$21 per pound.

Step-by-step explanation:

Revenue is defined as the income that is gained in selling a particular product to a consumer. It is the total amount earned before we consider costs incurred in the production process.

In this scenario to get the differential revenue of producing product C is

Differential revenue= Price of C - Price of B

Differential revenue= 40 - 19

Differential revenue= $21