Question

Ahngram Corp. has 1,000 carton of oranges that cost $10 per carton in direct costs and $16.50 per carton in indirect costs and sold for $30 per carton. The oranges can be processed further into orange juice at an additional cost of $12.50 and sold at a price of $46. The incremental income (loss) from processing the oranges into orange juice would be:

Multiple Choice

• $30,500.

• $22,500.

• ($30,500).

• $33,500.

• $23,500.

Answer 1

Incremental income (loss) from processing the oranges into orange juice = Additional Revenue - Additional costs

= 46*1000 - 12.50*1000

   = $33500