Answer:
While the president is correct about cocoa podwer the differential gain is higher producing Chocolate Syrup 23,000 agains t 13,000 from the Box assorted product. Thus is incorrect about which final product to convert the cocoa powder
<u>Missing Information:</u>
Revenue from cocoa powder: 14,000
Revenue from Chocolate Syrup 104,000
Revenue from Box assorted 202,000
Explanation:
We solve for the differential gain of each possible product:
<u>Chocolate Syrup</u>
marginal revenue 104,000 - 14,000 = 90,000
marginal cost <u> (67,000)</u>
contribution 23,000
<u> Box assorted </u>
marignal revenue 202,000 - 14,000 = 188,000
marginal cost <u> (175,000)</u>
contribution 13,000