Marsden manufactures a cat food product called Special Export. Marsden currently has 19,000 bags of...
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Marsden manufactures a cat food product called Special Export. Marsden currently has 19,000 bags of Special Export on hand. The variable production costs per bag are $1.8 and total fixed costs are $19,000. The cat food can be sold as it is for $9.0 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $3,500 cost. The additional processing will yield 19,000 bags of Prime Cat Food and 5,250 bags of Feline Surprise, which can be sold for $8.0 and $6.0 per bag, respectively.
If Special Export is processed further into Prime Cat Food and Feline Surprise, the total gross profit would be:
$187,000
$183,500
$180,000
$145,800
$126,800
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