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Maxim manufactures a hamster food product called Green Health. Maxim currently has 18,500 bags of Green Health on hand. The variable production cost per bag
Maxim manufactures a hamster food product called Green Health. Maxim currently has 18,500 bags of Green Health on hand. The variable production cost per bag are $3.70 and total fixed are $29,000. The hamster food can be sold as it is for $9 per bag or be processed further into Premium Green and Green Delux at an additional cost. The additional processing will yield 18,500 bags of Premium Green and 4,900 bags of Green Delux, which can be sold for $8 and $6 per bag respectively. The INCREMENTAL REVENUE of processing Green Health further into Premium Green and Green Delux would be:
$176,300
$10,900
$ 9,800
$1,100
$177,400
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