Question

Walters manufactures a specialty food product that can currently be sold for $22.90 per unit and has 20,900 units on hand. Alternatively, it can be further processed at a cost of $12,900 and converted into 12,900 units of Deluxe and 6,900 units of Super. The selling price of Deluxe and Super are $30.90 and $20.90, respectively. The incremental net income of processing further would be:

Answer 1

Increamental net income = $529,920-$478.610 = $51310

Step-by-step explanation:

Total sales revenue before the further processing = $22.9 * 20,900 =

$478.610

Total net sales revenue after the further processing = ($30.9 *12900)+($20,9*6900)-$12,900 = $529,920

Increamental net income = $529,920-$478.610 = $51310