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Knowledge Check 02 Potomac Backpacks, Inc. manufactures regular backpacks. The company is considering processing these backpa
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Answer #1

Incremental profit of processing further = Sales Revenue after processing – Sales Revenue before processing – Processing costs

= 75*8000-50*8000-(50-35)*8000 - 8000

= $72000

Hence, the answer is $72000

Please note that 50-35 represent additional variable cost incurred in hiking backpacks

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