A company has the choice of either selling 600 apples or processing them into applesauce. The company could sell the apples as is for $2.00 per unit. Alternatively, each apple could be made into one unit of applesauce with incremental costs of $0.60 per unit for direct materials, $1.00 per unit for direct labor, and $0.80 per unit for overhead, and then sold for $5.00 each. What is the amount of incremental revenue from processing the apples into applesauce?
A. $2.40 per unit.
B. $5.00 per unit.
C. $3.00 per unit.
D. $7.00 per unit.
E. $0.60 per unit.
Answer: C
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