Process or SellProduct T is produced for $3.56 per pound. Product T can be sold without additional processing for $4.29 per pound or processed further into Product U at an additional cost of $0.36 per pound. Product U can be sold for $4.44 per pound.Prepare a differential analysis dated November 15 on whether to sell T (Alternative 1) or process further into U (Alternative 2). If required, round your answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign.Differential AnalysisSell Product T (Alt. 1) or Process Further into Product U (Alt. 2)November 15 Sell Product T(Alternative 1)Process Furtherinto ProductU (Alternative 2)Differential Effecton Income(Alternative 2)Revenues, per unit$fill in the blank 9692f8f4c02b078_1$fill in the blank 9692f8f4c02b078_2$fill in the blank 9692f8f4c02b078_3Costs, per unitfill in the blank 9692f8f4c02b078_4fill in the blank 9692f8f4c02b078_5fill in the blank 9692f8f4c02b078_6Income (Loss), per unit$fill in the blank 9692f8f4c02b078_7$fill in the blank 9692f8f4c02b078_8$fill in the blank 9692f8f4c02b078_9Should Product T be sold (Alternative 1) or processed further into Product U (Alternative 2)?

Total cost of product U = Cost of product T + additional processing = $3.56 + $0.36 = $3.92 per unit

Answered: Product T is produced for $3.56 per…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 5BE

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Process or Sell

Product T is produced for $3.56 per pound. Product T can be sold without additional processing for $4.29 per pound or processed further into Product U at an additional cost of $0.36 per pound. Product U can be sold for $4.44 per pound.

Prepare a differential analysis dated November 15 on whether to sell T (Alternative 1) or process further into U (Alternative 2). If required, round your answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis
Sell Product T (Alt. 1) or Process Further into Product U (Alt. 2)
November 15
	Sell Product T (Alternative 1)	Process Further into Product U (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues, per unit	$fill in the blank 9692f8f4c02b078_1	$fill in the blank 9692f8f4c02b078_2	$fill in the blank 9692f8f4c02b078_3
Costs, per unit	fill in the blank 9692f8f4c02b078_4	fill in the blank 9692f8f4c02b078_5	fill in the blank 9692f8f4c02b078_6
Income (Loss), per unit	$fill in the blank 9692f8f4c02b078_7	$fill in the blank 9692f8f4c02b078_8	$fill in the blank 9692f8f4c02b078_9

Should Product T be sold (Alternative 1) or processed further into Product U (Alternative 2)?

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Decision to Sell before or after additional processing

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