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21 June, 12:02

Grace Co. can further process Product B to produce Product C. Product B is currently selling for $21 per pound and costs $14 per pound to produce. Product C would sell for $42 per pound and would require an additional cost of $11 per pound to produce. What is the differential revenue of producing and selling Product C? a.$21 per poundb.$31 per poundc.$28 per poundd.$42 per pound

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  1. 21 June, 13:01
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    Differential revenue = $21 per pound

    so here correct option is a.$21 per pound

    Explanation:

    given data

    Product B

    currently selling = $21 per pound

    costs = $14 per pound

    Product C

    sell = $42 per pound

    additional cost = $11 per pound

    to find out

    differential revenue of producing and selling Product C

    solution

    we get here differential revenue that is express as

    Differential revenue = selling price product C - selling price product B ... 1

    put here value we get

    Differential revenue = $42 - $21

    Differential revenue = $21 per pound

    so here correct option is a.$21 per pound
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