Hill Co.can further process Product O to produce Product P.Product O is currently selling for $65 per pound and costs $42 per pound to produce.Product P would sell for $82 per pound and would require an additional cost of $13 per pound to produce.
The differential cost of producing Product P is $56 per pound.

Question

Quizplus · Accepted Answer

The differential cost of producing Product P should be the difference between the cost of producing Product P and the cost of producing Product O.

Cost of producing Product P = $42 + $13 = $55 per pound

Differential cost of producing Product P = $55 - $42 = $13 per pound

Therefore, the given statement is false.

Hill CoCan Further Process Product O to Produce Product P