Question

Question 18 )Generals Co.can further process Product B to Product product A. product B currently selling for $12 per Generals Co can further process Product B to p pound and costs $9 per pound to produce. Product A would sell for $20 per pound and would require an additional cost of $5 per pound to produce. What is the differential cost of producing Product A? A) $9 per pound B) $14 per pound c)$5 per pound d)$3 per pound

Answer 1

C.$5 per pound.

differential cost is the cost required to further process to product A.

This requires an additional cost of $5 per pound.

So the differential cost of producing A = $5. per pound.