Prime scoops-canine sports at additional processing cost

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Reference no: EM131219408

Farina Foods manufactures a dog food product called Special Scoops. Farina currently has 20,000 bags of Special Scoops in inventory. The variable production costs per bag are $1.50 and total fixed costs are $20,000 per period. The dog food can be sold as is for $7 per bag, or it can be processed further into Prime Scoops and Canine Sports at an additional processing cost of $3,000. This additional processing will yield 15,000 bags of Prime Scoops, which can be sold for $8 per bag, and 10,000 bags of Canine Sports, which can be sold for $6 per bag. The decision that Farina should make and the reason is A. process Special Scoops further into Prime Scoops and Canine Sports to increase profits by $29,500. B. process Special Scoops further into Prime Scoops and Canine Sports to increase profits by $37,000. C. sell Special Scoops without additional processing to save $13,000. D. sell Special Scoops without additional processing to save $33,000.

Reference no: EM131219408

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