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Accounting

Problem:

Marsden manufactures a cat food product called Special Export. Marsden currently has 5,000 bags of Special Export on hand. The variable production costs per bag are $1.9 and total fixed costs are $5,000. The cat food can be sold as it is for $9.1 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $2,100 cost. The additional processing will yield 5,000 bags of Prime Cat Food and 3,150 bags of Feline Surprise, which can be sold for $8.1 and $6.1 per bag, respectively.

Required:

The net advantage (incremental income) of processing Special Export further into Prime and Feline Surprise would be:

$12,115
$14,215
$59,715
$2,100
$57,615

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164415

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