Maxim Manufactures a Hamster Food Product Called Green Health

question 5

Multiple Choice

Maxim manufactures a hamster food product called Green Health.Maxim currently has 10,000 bags of Green Health on hand.The variable production costs per bag are $1.80 and total fixed costs are $10,000.The hamster food can be sold as it is for $9.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost.The additional processing will yield 10,000 bags of Premium Green and 3,000 bags of Green Deluxe,which can be sold for $8 and $6 per bag,respectively.
-Assuming Maxim further processes Green Health further into Premium Green and Green Deluxe,revenue from the two products would be:

• A)$98,000.
• B)$96,000.
• C)$8,000.
• D)$6,000.
• E)$2,000.

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Definitions:

Graph

A visual representation of data designed to show relationships between different variables.

Quantity Demanded

The amount of a product that consumers are willing and able to purchase at a particular price, within a given time period.

Diagram

A simplified drawing showing the appearance, structure, or workings of something, often used to explain or clarify concepts or processes.

Excise Tax

This is a tax levied on specific goods, services, or transactions, usually to discourage their use or generate revenue from specific sectors.