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 $3.10 and total fixed costs are $10,000. The hamster food can be sold as it is for $8.45 per bag or be processed further into Premium Green and Green Deluxe at an additional $2,700 cost. The additional processing will yield 10,000 bags of Premium Green and 3,700 bags of Green Deluxe, which can be sold for $7.45 and $5.45 per bag, respectively. The net advantage (incremental income) of processing Green Health further into Premium Green and Green Deluxe would be:

Multiple Choice

• $94,665.

• $91,965.

• $10,165.

• $7,465.

• $2,700.