A manufacturing company currently produces 1,000 units of a product at a cost of $5,000. The units sell for $7,000. Alternatively, the company can process the units further to produce a refined product that will sell for $10,000. The additional processing will cost $4,000. The company should:

1. sell as is because processing further will reduce income by $6,000

2. sell as is because the incremental income of selling as is versus processing further will increase income by $1,000

3. process further because net incremental income will be $6,000

4. process further because net incremental income will be $1,000