Alia Co.can further process Product X to produce Product Y.Product X is currently selling for $20 per pound and costs $15 per pound to produce.Product Y would sell for $30 per pound and would require an additional cost of $8 per pound to produce.What is the differential cost of producing Product Y?
A) $15 per pound
B) $23 per pound
C) $8 per pound
D) $5per pound

Question

Quizplus · Accepted Answer

The differential cost of producing Product Y is the additional cost required to convert Product X into Product Y, which is $8 per pound. This does not include the cost of producing Product X, only the extra cost to upgrade it to Product Y.

Alia CoCan Further Process Product X to Produce Product Y