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Bad White [126]
2 years ago
5

American Chemical Company manufactures a chemical compound that is sold for $57 per gallon. A new variant of the chemical has be

en discovered, and if the basic compound were processed into the new variant, the selling price would be $81 per gallon. American expects the market for the new compound variant to be 8,100 gallons initially and determines that processing costs to refine the basic compound into the new variant would be $162,000. Required: a. What would be the effect on total profit if American produces the new compound variant
Business
1 answer:
Yakvenalex [24]2 years ago
6 0

Answer:

Effect on income= $32,400 increase

Explanation:

Giving the following information:

Difference in selling price= 81 - 57= $24

Number of units= 8,100

Increase in costs= $162,000

<u>To calculate the effect on income, we need to use the following formula:</u>

Effect on income= Increase in revenue - increase in costs

Effect on income= 24*8,100 - 162,000

Effect on income= $32,400 increase

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The options in this question are missing; here is the missing section:

What two types of departmentalization are illustrated in this example?

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Explanation:

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