What is the amount of differential income


Question: Batch size 5,400 gallons Cost of producing kerosene $2,900 per batch Selling price $2.90 per gallon The kerosene can be processed further to yield gasoline as follows: Initial batch size 5,400 gallons Less evaporation (25%) (1,350) (5,400 × 25%) Output batch size 4,050 gallons Additional processing costs $840 per batch Selling price $4.40 per gallon What is the amount of differential income from further processing the gasoline per batch? a. $4,050 b. $8,100 c. $1,320 d. $8,910

 

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Accounting Basics: What is the amount of differential income
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