Question

Process or Sell Product D is produced for $24 per gallon. Product D can be sold without additional processing for $36 per gallon or processed further into Product E at an additional cost of $9 per gallon. Product E can be sold for $43 per gallon. Prepare a differential analysis dated February 26 on whether to sell Product D (Alternative 1) or process further into Product E (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Answer 1

Answer:

Sell Product D

Explanation:

The computation of the differential analysis dated February 26 is presented below:

Particulars    Sell D(ALT 1)   Process Further Into E(ALT 2) Differential Effect(ALT 2)

Revenues

per unit               $36                         $43                                    $7

Costs per unit     $24                          $33                                  $9

Income(Loss)

per unit                $12                           $10                                  -$2

Here we should do that Sell Product D