Prepare a differential analysis dated August 2 on whether to sell Product T (Alternative 1) or process further into Product U (Alternative 2). Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

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Product T is produced for $5.90 per pound. Product T can be sold without additional processing for $7.10 per pound, or processed further into Product U at an additional cost of $0.74 per pound. Product U can be sold for $8.00 per pound. Required: 1. Prepare a differential analysis dated August 2 on whether to sell Product T (Alternative 1) or process further into Product U (Alternative 2). Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required. 2. Should Product T be sold (Alternative 1) or processed further into Product U (Alternative 2)? Amount Descriptions Amount Descriptions Costs, per unit Income (Loss), per unit Revenues, per unit Differential Analysis 1. Prepare a differential analysis dated August 2 on whether to sell Product T (Alternative 1) or process further into Product U (Alternative 2). Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required.

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Answer:

Company Should go for further processing because in the further processing profit per unit increase. If company sold product T it will get profit of $ 1.20 per unit but if company go for product u it will have $ 1.36 profit per unit

Working notes are as under

Product T
Particular Amount in $
Product T is produced for $5.90
T can be sold without additional processing for $7.10
Net profit is sold without further processing $1.20
Product U
Particular Amount in $
Product T is produced for $5.90
Add:
Further Processing Cost $0.74
Total Cost for Product U $6.64
Less:
Sales Price for Product U $8
Net profit is sold After further processing $1.36
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