Hill Co.can further process Product O to produce Product P.Product O is currently selling for $65 per pound and costs $42 per pound to produce.Product P would sell for $82 per pound and would require an additional cost of $13 per pound to produce.The differential revenue of producing Product P is $17 per pound.

Question

Quizplus · Accepted Answer

The differential revenue of producing Product P is calculated by subtracting the additional cost of producing Product P from its selling price, which is $82 - $13 = $69 per pound. The differential revenue of $17 per pound is higher than the differential cost of $13 per pound, indicating that it would be profitable to further process Product O into Product P.

Hill CoCan Further Process Product O to Produce Product P