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 $2.10 and total fixed costs are $10,000. the hamster food can be sold as it is for $9.35 per bag or be processed further into premium green and green deluxe at an additional $2,300 cost. the additional processing will yield 10,000 bags of premium green and 3,300 bags of green deluxe, which can be sold for $8.35 and $6.35 per bag, respectively. the net advantage (incremental income) of processing green health further into premium green and green deluxe would be:
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Maxim manufactures a hamster food product called green health. maxim currently has 10,000 bags of gr...
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