Question

Grace Co. can further process Product B to produce Product C. Product B is currently selling for $60 per pound and costs $38 per pound to produce. Product C would sell for $95 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C? a.$60 per pound b.$38 per pound c.$35 per pound d.$95 per pound

Answer 1

c.$35 per pound

Step-by-step explanation:

The computation of the differential revenue of producing and selling Product C is shown below:

= Revenue arise from selling the product C - Revenue arise from selling the product B

= $95 per pound - $60 per pound

= $35 per pound

By deducting the revenue of Product B from the revenue of product C we can get the differential revenue