Question 232.5 pts

Chapter 7 Differential Analysis:

In practice, when conducting differential analysis, a product should be dropped when

Group of answer choices

Competition arises in the market

The firm has nondiscretionary fixed costs

Dropping it will neither increase nor decrease total profit of the company

Revenue gained from selling product does not cover variable cost of producing and selling product

None of the above

Flag question: Question 24Question 242.5 pts

Walmart Co. has in-store space that it continuously utilizes to make and sell carmeled popcorn. The only other possible use of that space would be to rent it to a discount optometrist, $1.99 Optical. From Walmart Co.s perspective, the foregone rent revenue represents

Group of answer choices

a sunk cost for Walmart Co.

a differential cost for Walmart Co.

an opportunity cost for Walmart Co.

a discretionary cost for Walmart Co.

All of the above

Flag question: Question 25Question 252.5 pts

Squeeze Fresh Co. can further process a gallon of Lemonade to produce a gallon of Melonade. Lemonade is currently selling for $65 per gallon and costs $42 per gallon to produce. Melonade would sell for $87 per gallon and would require an additional cost of $13 per gallon to produce. What is the differential revenue of producing and selling Melonade?

Group of answer choices

$22 per gallon

$29 per gallon

$32 per gallon

$55 per gallon

None of the above

Flag question: Question 26Question 262.5 pts

Parkay Co. can further process Butter to produce Cream. Butter is currently selling for $30 per pound and costs $28 per pound to produce. Cream would sell for $60 per pound and would require an additional cost of $24 per pound to produce. What is the differential cost of producing Cream?

Group of answer choices

$4 per pound

$24 per pound

$28 per pound

$34 per pound

None of the above

Flag question: Question 27Question 272.5 pts

Valero Co. can further process Kerosene to produce Gasoline. Kerosene is currently selling for $60 per pound and costs $42 per pound to produce. Gasoline would sell for $82 per pound but would require an additional cost of $13 per pound to produce. The differential income of producing Gasoline is

Group of answer choices

$27 per pound

$22 per pound

$18 per pound

$9 per pound

None of the above