Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $55 per pound and would require an additional cost of $31 per pound to produce. What is the differential cost of producing Product C? A. $30 per poundB. $55 per poundC. $28 per poundD. $31 per pound

Question

Business

Mason Bauer

1 September, 19:18

Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $55 per pound and would require an additional cost of $31 per pound to produce. What is the differential cost of producing Product C? A. $30 per poundB. $55 per poundC. $28 per poundD. $31 per pound

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Answers (1)

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Slick · Answer 1

Answer: 56 dollars

Explanation:

Revenue/cost product B product C Differential cost

Cost of goods sold 30 55 25

Cost of production 28 59 31

Total 58 114 56

Net operating income 2 - 4

The differential cost of producing product C is 56 dollars (114 - 58)

Conclusively, Yasmin Co should stick to the production of of Product B because it has a higher net income of 2.