Holmes Company produces a product that can be either sold as is or processed further. Holmes has already spent $78,000 to produce 2,125 units that can be sold now for $97,500 to another manufacturer. Alternatively, Holmes can process the units further at an incremental cost of $275 per unit. If Holmes processes further, the units can be sold for $415 each. Compute the incremental income if Holmes processes further.

Sell as is Process Further Incremental Amount

Sales $97,500

Additional processing costs

Income (loss) $97,500

The company should:Process further