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Marsden manufactures a cat food product called Special Export. Marsden currently has 10,000 bags of Special Export on hand. The variable production costs per bag
Marsden manufactures a cat food product called Special Export. Marsden currently has 10,000 bags of Special Export on hand. The variable production costs per bag are $2.40 and total fixed costs are $10,000. The cat food can be sold as it is for $9.65 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $2,600 cost. The additional processing will yield 10,000 bags of Prime Cat Food and 3,600 bags of Feline Surprise, which can be sold for $8.65 and $6.65 per bag, respectively. The net advantage (incremental income) of processing Special Export further into Prime and Feline Surprise would be: Multiple Choice $107,840. $11,340. $110,440. O $2,600. $13,940
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