Paola Farms, Inc. produces a crop of chickens at a total cost of $66,000. The production generates 60,000 chickens which can be sold for $1 each to a slaughtering company, or the chickens can be slaughtered in house and then sold for $2.25 each. It costs $55,000 more to turn the annual chicken crop into chicken meat.
Instructions
If Paola Farms slaughters the chickens, determine how much incremental profit or loss it would report. What should Paola Farms do?

Question

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The Answer of Paola Farms, Inc. produces a crop of chickens at a total cost of $66,000. The production generates 60,000 chickens which can be sold for $1 each to a slaughtering company, or the chickens can be slaughtered in house and then sold for $2.25 each. It costs $55,000 more to turn the annual chicken crop into chicken meat.
Instructions
If Paola Farms slaughters the chickens, determine how much incremental profit or loss it would report. What should Paola Farms do?