A Company Has the Choice of Either Selling 600 Apples

question 80

Multiple Choice

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)$3.00 per unit.
• B)$5.00 per unit.
• C)$7.00 per unit.
• D)$2.40 per unit.
• E)$0.60 per unit.

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