Is the incremental income 950 since thats how much they

Reference no: EM13596338

Pep Manufacturing produces Product K in batches of 4,000 gallons at $.60 per gallon. Product K can be sold without further processing for $0.80 per gallon. Product K can be processed further to yield Product G, which can be sold for $1.25 per gallon. Product G requires additional processing costs at $1,650 per batch.
Instructions
Compute the incremental income from further production of one batch of Product K.

Is the incremental income $950 since that's how much they would be the net income of selling product G or would it be $150 because that's how much the net income increases by producing product G?

Reference no: EM13596338

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