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29 May, 10:58

An unfinished desk is produced for $36.45 and sold for $64.35. A finished desk can be sold for $76.00. The additional processing cost to complete the finished desk is $6.45. Provide a differential analysis for further processing. Round your answers to two decimal places, if necessary. Differential revenue from further processing: Revenue per unfinished desk $ 64.35 Revenue per finished desk 76.00 Differential revenue $ - 11.65 Differential cost per desk: Additional cost for producing - 6.45 Differential income from further processing

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  1. 29 May, 11:11
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    It is more profitable to continue processing by $5.2 per desk.

    Explanation:

    Giving the following information:

    An unfinished desk is produced for $36.45 and sold for $64.35.

    A finished desk can be sold for $76.00.

    The additional processing cost to complete the finished desk is $6.45.

    We need to determine the effect on the income for further processing the desk.

    Contribution margin per unfinished desk = 64.35 - 36.45 = $27.9

    Contribution margin per finished desk = 76 - 36.45 - 6.45 = $33.1

    It is more profitable to continue processing.
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