Ask Question
14 February, 14:17

Product J19 is produced for $11 per gallon. Product J19 can be sold without additional processing for $18 per gallon, or processed further into Product R33 at an additional cost of $7 per gallon. Product R33 can be sold for $24 per gallon.

Required:

Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2).

+4
Answers (1)
  1. 14 February, 15:10
    0
    Answer: If Product J19 is processed further into Product R33, the company would make $1 less than if Product J19 was sold as is.

    Explanation:

    Alternative 1 - Product J19

    We are given the following for Alternative 1

    Sales Price = $18

    Cost = $11

    Therefore the income from Alternative 1 is,

    = 18 - 11

    =$7

    Alternative 2 - Product R33.

    We are given the following,

    Sales Price = $24

    Cost = $11 of the original + $7 additional cost

    = $18

    Thus income is,

    = 24 - 18

    = $6

    The income from Alternative 1 is $7 while the income from Alternative 2 is $6.

    This means that if Product J19 is processed further into Product R33 and sold, the company would make $1 less than if Product J19 was sold as is.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Product J19 is produced for $11 per gallon. Product J19 can be sold without additional processing for $18 per gallon, or processed further ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers