Green Hat

Green Hat produces a fish food product called Power Blue muscle builder. Green Hat currently has 15,000 bags of Power Blue on hand. The variable production costs per bag are $2.30 and total fixed costs are $15,000. The fish food can be sold as it is for $11.00 per bag or be processed further into Super Blue and Mega Blue at an additional cost. The additional processing will yield 15,000 bags of Super Blue and 3500 bags of Mega Blue, which can be sold for $10 and $8 per bag, respectively. Assuming Green Hat further processes Power Blue further into Super Blue and Mega Blue, revenue from the two products would be: $13,000 $178,000 $172,000 $7000