Question

In 2020, the Allen Company had consulting revenues of $1,197,000 while operating costs were $720,000. In 2021, Allen will be introducing a new service that will generate $165,000 in sales revenues and $57,000 in operating costs. Assuming no changes are expected for the other services, the differential revenue for 2021 will be: Multiple Choice $108,000. $477,000.

Answer 1

Answer:

$165,000

Explanation:

Given that,

In 2020,

Consulting revenues = $1,197,000

Operating costs = $720,000

In 2021,

Sales revenue generated = $165,000

Operating costs = $57,000

Therefore, the differential revenue refers to the additional revenue earned or generated during an accounting period. Hence, in 2021, there is an additional sales revenue generated by the company of amount $165,000.

So, the the differential revenue for 2021 will be $165,000.