Jones Co. can further process Product B to produce Product C. Product B is curre
ID: 2497128 • Letter: J
Question
Jones Co. can further process Product B to produce Product C. Product B is currently selling for S30 per pound and costs S28 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 business received an offer from an exporter for 10,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: What is the amount of gain or loss from acceptance of the offer'?Explanation / Answer
7.
Answer: b. $ 24 per pound
Cost producing of product C
= Cost (B + C) - COST (B)
= $(28 + 24) - $28
= $52 - $28
= $24
8.
Answer: a. $30,000 Gain
Variable costs = $13 per unit
Price of the units = $16 per unit
Number of units is 10,000
Gain for accepting the offer = [ 10,000 x ($16 - $13) ]
= $30,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.