Answers
| A | Revenue from Product C | $ 44 | per pound |
| Less: Revenue from Product B | $ 23 | per pound | |
| Differencial Revenue | $ 21 | per pound | |
| B | Original cost of old equipment | $ 540,000 | |
| Less: Accumulated Depreciation | $ 378,000 | ||
| Sunk Cost | $ 162,000 | ||
| C | Units in offer | $ 27,500 | |
| X Selling price in offer | $ 17 | ||
| Differencial Revenue | $ 467,500 | ||
| D | Units in offer | $ 24,000 | |
| X Variable cost per unit | $ 12 | ||
| Differencial Cost | $ 288,000 | ||
| E | Differencial Revenue (29000 * $19) | $ 551,000 | |
| Less: Differencial Cost (29000 * $10) | $ 290,000 | ||
| Amount of income or loss | $ 261,000 | income | |
| F | Equipment Leased : | ||
| Lease Income | $ 49,000 | ||
| Less: Repair, Insurance & Property tax | $ 12,000 | $ 37,000 | |
| Equipment Sold : | |||
| Sale price of equipment | $ 29,000 | ||
| Less: Broker Commission | $ 2,900 | $ 26,100 | |
| Net Differential Income | $ 10,900 |
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