Process or Sell Product 319 is produced for $3.5 per gallon. Product 319 can be

Question

Process or Sell Product 319 is produced for $3.5 per gallon. Product 319 can be sold without additional processing for $4.29 per gallon, or an additional cost of $0.35 per gallon. Product R33 can be sold for $4.44 per gallon. a. Prepare a differential analysis dated April 30 on whether to sell Product J19 (Alternative 1) or process further into Product R33 (Alternative 2). If required, round your answers to the nearest whole dollar. Differential Analysis Sell Product 119 (Alt. 1) or Process Further into Product R33 (Alt. 2) sell Product J19 (Alternative 1) Process Further into Product R33 (Alternative 2) Diferential Eflect on Income (Altemative 2) Revenues, per unit Costs, per unit Income Closs), per unit b. Should Product 319 be sold (Alternative 1) or processed further into Product R33 (Alternative 2)? Sell Product 319 Check My Work 5 more Check My work uses remaining 5 more Check My Work uses remaining PreviousNext

Explanation / Answer

a) Differential analysis :

b) Sell product J19 without further processing

Sell product (alternative 1) Process further into product (Alternative 2) Differential effect on income (alternative 2) Revenue per unit 4.29 4.44 0.15 Cost per unit 0 -0.35 -0.35 Income (loss) per unit 4.29 4.09 -0.20

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