Pottery, Inc crafts local pottery. The cost of getting the pottery ready for market is about...

Question

Question

Pottery, Inc crafts local pottery.

The cost of getting the pottery ready for market is about $20 per pound of clay.

Each pound of clay produces 4 unglazed pieces of art that sells for $8 per piece.

Pottery, Inc can glaze the clay for an additional $7. The glazed art will still produce 4 pieces of art that sells for $11 per piece.

By how much will Pottery's income change if they glaze 30 pounds of clay (label as an increase or decrease) as opposed to selling them unglazed?

business accounting

Answer 1

Answer #1

Incremental Revenue in Glazing Per Pound	12.00	(11-8)*4
Less: Incremental Cost in Glazing Per Pound	7.00
Incremental Income in Glazing Per Pound	5.00
Total Clay Qty	30.00
Increase in Income	150.00

Answer is C

Answer 2

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