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Maxim manufactures a cat food product called Green Health. Maximum 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. Maximum currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $3.30 and total fixed costs are $10,000. The cat food can be sold as it is for $8.65 per bag or be processed further into Premium Green and Green Deluxe at an additional $2, 500 cost. The additional processing will yield 10,000 bags of Premium Green and 3, 500 bags of Green Deluxe, which can be sold for $7.65 and $5.65 per bags, respectively. If Green Health is processed further into Premium Green and Green Deluxe, the total gross profit would be: $98, 775. $50, 775. $96, 275. $60, 775. $93, 775
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