Question

Maxim manufactures a hamster food product called Green Health. Maxim currently has 11,500 bags of Green Health on hand. The variable production costs per bag are $2.10 and total fixed costs are $13,000. The hamster food can be sold as it is for $10.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 11,500 bags of Premium Green and 3,300 bags of Green Deluxe, which can be sold for $9 and $7 per bag, respectively. Assuming Maxim further processes Green Health further into Premium Green and Green Deluxe, revenue from the two products would be:

Answer 1

$126,600

Step-by-step explanation:

Calculation to determine what the revenue from the two products would be:

Venue if processed further:

Premium Green (11,500 bags * $9 per bag) $ 103,500

Green Deluxe (3,300 bags * $7 per bag) $23,100

Total revenue if processed further $ 126,600

($103,500+$23,100)

Therefore Assuming Maxim further processes Green Health further into Premium Green and Green Deluxe, revenue from the two products would be:$126,600