Textbook Problem

Process or sell

Product T is produced for $5.90 per pound. Product T can be sold without additional processing for $7.10 per pound, or processed further into Product U at an additional cost of $0.74 per pound. Product U can be sold for $8.00 per pound. Prepare a differential analysis dated August 2 on whether to sell Product T (Alternative 1) or process further into Product U (Alternative 2).