Question

Calgary Lumber Company incurs a cost of $45 per hundred board feet in processing certain "rough-cut" lumber, which it sells for $51 per hundred board feet. An alternative is to produce a "finished-cut" at a total processing cost of $55 per hundred board feet, which can be sold for $72 per hundred board feet. If Calgary chooses to produce "finished-cut", how much is differential income?

Group of answer choices

$ 10 per hundred board feet

$ 1 per hundred board feet

$ 21 per hundred board feet

$ 11 per hundred board feet

Green Equipment Corporation requires a profit of $5,000 on each piece of equipment it sells. Because the total manufacturing cost is an estimated $25,000, Green planned to sell the equipment for $30,000, a markup percentage of 20% on total manufacturing cost. But Green needs to sell its equipment for $27,000 in order to be competitive. If Green reduces its total manufacturing cost by $3,000 and sells the equipment for $27,000, Green's markup percentage will

Group of answer choices

decrease to 11.1%

decrease to 18.5%

increase to 22.7%

remain the same.

9Smart Stream Inc., has the following absorption costing Income Statement:

Sales revenue	$190,000
Cost of goods sold	110,000
Gross profit	$80,000
Operating expenses	50,000
Net income	$ 30,000

The markup percentage on product cost is (approximately)

Group of answer choices

138%

42%

58%

73%

Answer 1

Differential income/Loss is an increase/ decrease in income because of choosing one alternative over another

	Rough Cut	Finished Cut	Increase in income per hundred feet
sales price	$51	$72	$21[$72-51]
cost	($45)	($55)	($10) [55-45]
Net increase (decrease ) in income	$6	$17	$11 [21-10]

Thus, if finsihed cut is choosed over rough cut the net income will increase by $11 per hundered feet

AnswerD)

We can answer only one question per post. Please upload other questions separately.

Please upvote if you find this helpful. In case of query please comment.