Pheasant Co. can further process Product B to produce Product C Product B is currently selling for $30 per pound and costs $28 per pound to produce. Product C would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Product C?
A) $30 per pound
B) $24 per pound
C) $28 per pound
D) $60 per pound

Question

Quizplus · Accepted Answer

The differential cost of producing Product C is the additional cost required to produce Product C compared to the cost of producing Product B. Therefore, the differential cost of producing Product C is $24 per pound ($24 additional cost to produce Product C - $0 additional cost to produce Product B). Option B is the correct choice.