Granger Co. can further process Product B to produce C. Product B is currently selling for $55 per pound and costs $42 per pound to produce. Product C would sell for $82 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C?
A) $15 per pound
B) $42 per pound
C) $45 per pound
D) $27 per pound

Question

Granger Co. can further process Product B to produce C.  Product B is currently selling for $55 per pound and costs $42 per pound to produce. Product C would sell for $82 per pound and would require an additional cost of $13 per pound to produce. What is the differential revenue of producing and selling Product C?
A) $15 per pound
B) $42 per pound
C) $45 per pound
D) $27 per pound

Quizplus · Accepted Answer

The differential revenue is the difference in selling prices between Product C and Product B, which is $82 - $55 = $27 per pound.