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Maxim manufactures a hamster 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 hamster food product called Green Health Maxim currently has 10,000 bags of Green Health on hand. The variable production costs per bag are $3.60 and total fixed costs are $10,000. The hamster food can be sold as it is for $8.95 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 $7.95 and $5.95 per bag, respectively. The net advantage (incremental income) of processing Green Health further into Premium Green and Green Deluxe would be: Multiple Choice 0 $2.200 0 $9,040 0 O $98,540 0 $96,340. 0 $6.840. Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $9.30: direct labor, $23.30, and overhead, $15.30. An outside supplier has offered to sell the product to Wheeler for $43.28. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying. Multiple Choice $3.99 savings per unit. $3.99 cost per unit. $1.50 savings per unit. $1.50 cost per unit. $4.56 cost per unit
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