A dairy producer can produce 100,000 kilograms of plain yogurt at a total variable production cost of
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Question:
A dairy producer can produce 100,000 kilograms of plain yogurt at a total variable production cost of $100,000. This plain yogurt has a sales value of $120,000. Alternatively, it can add fruit and other ingredients to this batch of yogurt which would cost an additional $15,000, and sell the batch for $150,000. What would be the effect of adding fruit and other ingredients to the yogurt?
Multiple Choice
The company’s profit would decrease by $20,000.
The company’s profit would decrease by $10,000.
The company’s profit would increase by $20,000.
The company’s profit would increase by $15,000.
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
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