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 $1.80 and total fixed costs are $10,000. The cat food can be sold as it is for $9 per bag or it can be processed further into Prime Cat Food and Feline Surprise at an additional $2,000 cost. The additional processing will yield 10,000 bags of Prime Cat Food, which can be sold for $8 per bag and 3,000 bags of Feline Surprise, which can be sold for $6 per bag. Prepare an analysis that shows whether the 10,000 bags of Special Export should be sold as is or processed further.

How much revenue will Marsden earn if it processes the cat food further into Prime Cat Food and Feline Surprise?

What will be the incremental change to revenue, if Marsden processes the cat food further into Prime Cat Food and Feline Surpise?

What will be the incremental cost increase, if Marsden processes the cat food further into Prime Cat Food and Feline Surpise?

What will be the incremental change in net income, if Marsden processes the cat food further into Prime Cat Food and Feline Surprise?

Specify whether Marsden should sell Special Export cat food as is or process it further into Prime Cat Food and Feline Surprise.