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I'm posting a question and it's solutions. However, I'd like to know how the problem is calculating Incremental Revenues and Incremental Costs
I'm posting a question and it's solutions. However, I'd like to know how the problem is calculating "Incremental Revenues" and "Incremental Costs" in the second table from problem 9.
Beginning graph given for all problems:
PRODUCT | Sales price per yard at split-off | Disposal cost per yard at split-off | Further processing per yard | Final sale price per yard |
A | $7.00 | $4.50 | $1.50 | $8.00 |
C | $10.00 | $6.00 | $3.50 | $12.25 |
8.
PRODUCTS | Final Sales Price | Separate Cost per Yard | Net Sales Price | Approximated NRV | |
A | $8.00 | $6.00 | $2.00 | $3,600 | |
C | $12.25 | $9.50 | $2.75 | $7,150 | |
$10,750 | |||||
$(3,600/10,750)*$9,000= $3,014 |
PRODUCTS | Final Sales Price | Separate Cost per Yard | Net Sales Price | Approximated NRV | |
A | $8.00 | $6.00 | $2.00 | $3,600 | |
C | $12.25 | $9.50 | $2.75 | $7,150 | |
$10,750 | |||||
$(7,150/10,750)*$9,000= $5,986 |
9. Refer to Riley Company. Which products would be processed further?
Answer: neither Product A or C
PRODUCT | Incremental Revenues??? | Incremental Costs??? | Net Difference | |
A | $1.00 | $1.50 | $(0.50) | |
C | $2.25 | $3.00 | $(0.75) |
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