Question

Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $33 per pound and costs $29 per pound to produce. Product C would sell for $56 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Product C

Answer 1

Differential cost Product C= $24 per pound

Step-by-step explanation:

Giving the following information:

Product C would sell for $56 per pound and would require an additional cost of $24 per pound to produce.

The first cost of product B will remain constant whether Product C is made or not. Therefore, it is not an incremental cost.

Differential cost= incremental cost

Differential cost Product C= $24 per pound