Respuesta :
Answer:
The correct option is B,the net income will increase by $800 per day.
Explanation:
The increase or decrease in net income of Clary Corporation can be looking at it from incremental cost/benefit perspective.
In order to arrive at the correct option, the increment in sales as a result of further processing is calculated and the increment in cost is deducted from it
Increment in sales ($2.9-$2)*2000 $1800
Increment in costs ($1000)
Increase in net income $800
Option A is wrong because as it only considered the increase in cost .
Option C is wrong as it only considered in revenue
Answer:
The correct answer is:
increase by $800 per day (b.)
Explanation:
The question is asking us to compare the incomes gotten by Clary if she sells 2000 units of the product as Y, or as Z and make an inference from the options given.
First of all, we will calculate the total income gotten when the product is sold as Y. This is calculated as follows;
Product as Y;
1 unit = $2
∴ 2,000 units = $4,000
Next let us calculate the income gotten from the product as Z;
Product as Z;
1 unit = $2.90
2,000 units = 2.90 × 2,000 = $5,800.
We are also told that in order to transform the product Y to Z, an additional cost of $1,000 was incurred, so to get the net income from Z, we will subtract this amount from the total income of Z;
Net income from Z = 5,800 - 1,000 = $4,800
Comparing the two incomes from Y and Z, we see that selling the product as Y brings an income of $4,000, while as Z, brings an income of $4,800, and the difference is $4,800 - $4,000 = $800. Since Clary processes the product from Y further to Z, the net income increase by $800 per day(b.)
