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 $ 175,000 $ 230,000 Unit-level costs 33,000 44,000 Batch-level costs 20,500 32,000 Product-level costs 23,000 25,000 Facility-level costs 18,000 20,500 What is the differential revenue for this decision?

Answer 1

$55,000

Step-by-step explanation:

Differential Revenue

Alternative A Alternative B

Projected revenue $ 175,000 $ 230,000

Hence :

Alternative A - Alternative B = Differential Revenue

$ 175,000 - $ 230,000

=$55,000

Therefore the differential revenue for this decision will be $55,000