Question

QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 180,000 $ 240,000 Unit-level costs 34,000 45,000 Batch-level costs 21,500 33,000 Product-level costs 24,000 26,000 Facility-level costs 19,000 21,500 What is the differential revenue for this decision

Answer 1

$60,000

Step-by-step explanation:

Data provided for calculating the differential revenue is here below:-

Projected revenue A revenue = $180,000

Projected revenue B revenue = $240,000

The computation of differential revenue is shown below:-

Differential revenue = Projected revenue B revenue - Projected revenue A revenue

= $240,000 - $180,000

= $60,000

So, for computing the differential revenue we simply applied the above formula.