You are watching: The amount of income that would result from an alternative use of cash is called
If the total unit price of production Product Y is right now $40 and also the total unit cost after editing the style is estimated to it is in $48, the differential cost for this instance is $48.
Hill Co. Have the right to further process Product O to create Product P. Product O is at this time selling for $65 every pound and costs $42 per pound to produce. Product ns would offer for $82 every pound and would require second cost of $13 per lb to produce.The differential revenue of creating Product p is $82 every pound.
Hill Co. Deserve to further procedure Product O to produce Product P. Product O is currently selling because that $65 per pound and also costs $42 per lb to produce. Product ns would offer for $82 every pound and would require an additional cost of $13 per pound to produce.The differential revenue of developing Product ns is $17 per pound.
Hill Co. Have the right to further process Product O to produce Product P. Product O is right now selling for $60 every pound and also costs $42 per pound to produce. Product p would offer for $82 every pound and would require secondary cost the $13 per lb to produce.The differential cost of producing Product ns is $13 every pound.
Hill Co. Deserve to further process Product O to develop Product P. Product O is right now selling because that $65 every pound and costs $42 per pound to produce. Product p would market for $82 every pound and would require second cost the $13 per lb to produce.The differential price of developing Product ns is $56 per pound.
Differential evaluation can help management in making decision on a variety of alternatives, consisting of whether come discontinue one unprofitable segment and also whether to change usable plant assets.
Differential revenue is the lot of income that would an outcome from the best available alternative because that the proposed usage of cash.
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Differential revenue is the lot of boost or to decrease in revenue expected from a certain course of activity as compared to an alternative.
