(Answered) Question - a business produces product a in batches of 5000

Accounting

Question - A business produces Product A in batches of 5,000 gallons,which can be sold for $3 per gallon. The business has been offered $5 per finished gallon to process two batches of Product A futher into Product B. Product B will require additional processing costs of $7,800 per batch, and 10% of the gallons of Product A will evaporate during processing. What is the amount of gain or loss from futher processing of Product A?

A. $7,200 gain

B. $4,400 gain

C. $2,400 gain

D. $600 loss

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