Answer:
The incremental income if processes further is 256,500
Explanation:
We need to compare the income on each stage:
currently
67500 revenues
- 86000 cost =
-18500 loss
further process
revenues$ 395x 2,400 units 948,000
cost
86,000 Beginning (previous stage cost)
2,400 units x $260. each
624,000 added during the process
total cost 710,000
revenues - total cost = income
948,000 - 710,000 = 238,000
<u>incremental income</u>
238,000 - (-18,500) = <em>256,500</em>