Question
Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag
Maxim manufactures a cat food product called Green Health. Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $2.00 and total fixed costs are $10,000. The cat food can be sold as it is for $9.25 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,200 cost. The additional processing will yield 10,000 bags of Premium Green and 3,200 bags of Green Deluxe, which can be sold for $8.25 and $6.25 per bag, respectiviely. If Green Health is processed further into Premium Green and Green Deluxe, the total gross profit would be:
A. $70,300
B. $104,700
C. $80,300
D. $100,300
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