Green Co.incurs a cost of $15 per pound to produce Product X, which it sells for $26 per pound.The company can further process Product X to produce Product Y.Product Y would sell for $30 per pound and would require an additional cost of $10 per pound to be produced.The differential revenue of producing Product Y is _____.
A) $4 per pound
B) $30 per pound
C) $26 per pound
D) $5 per pound

Question

Quizplus · Accepted Answer

The differential revenue is the difference in revenue between selling Product Y and Product X. Product Y sells for $30 per pound, and Product X sells for $26 per pound, resulting in a differential revenue of $4 per pound ($30 - $26).

Green CoIncurs a Cost of $15 Per Pound to Produce Product