Partridge Co can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $37 per pound and would require an additional cost of $9.25 per pound to produce. What is the differential revenue of producing Product D?
A) $6.75 per pound
B) $9.25 per pound
C) $16 per pound
D) $5.25 per pound
C
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The projected sales price for a new product (which is still in the development stage of the product life cycle) is $50 . The company has estimated the life-cycle cost to be $30 and the first-year cost to be $60 . On this type of product, the company requires a $12 per unit profit. What is the target cost of the new product?
a. $30 b. $38 c. $42 d. $60
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