Reference: 23_01 Marsden Manufactures a Cat Food Product Called Special Export. Marsden

Reference: 23_01
Marsden manufactures a cat food product called Special Export. Marsden currently has 10,000 bags of Special Export on hand. The variable production costs per bag are $1.80 and total fixed costs are $10,000. The cat food can be sold as it is for $9 per bag or be processed further into Prime Cat Food and Feline Surprise at an additional $2,000 cost. The additional processing will yield 10,000 bags of Prime Cat Food and 3,000 bags of Feline Surprise, which can be sold for $8 and $6 per bag, respectively.
-The net advantage (incremental income) of processing Special Export further into Prime and Feline Surprise would be:

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