Chemco employs a joint process (cost: $100,000) that produces two chemicals, JAV-100 and YAZ-200. At the current volumes, the value of these products at the split-off point is $80,000 and $40,000, respectively. Chemco has the option of spending $25,000 to further process YAZ-200 into YAZ-400, with a sales value of $80,000.

Required:
a. Suppose Chemco does not process YAZ-200 further. Allocate joint costs to the two products using the revenue from the product as the allocation basis. Calculate the profit earned from each product, taking the allocated costs into account. (Round all numbers to the nearest dollar.)
b. Repeat the exercise in part (a) except assume that Chemco does process YAZ-200 into YAZ-400.
c. Focusing on the product level profit calculated in parts (a) and (b), should Chemco process YAZ-200 into YAZ-400? Why is this comparison suspect?