The following data relate to the manufacturing process of Hilton Laboratories, which produces two joint products:

The production manager has proposed that management consider a small change in the manufacturing process. By cooking the material slightly longer, the ratio of production for the two products can be changed to 50 percent each. However, as a result of the increased cooking time, there would be a shrinkage of 3 percent in volume, and additional labor costs of $1,400 per month would be incurred. There would be no change in the sales or the selling cost per unit.
Prepare an analysis of the current profitability and the future profitability if the proposed manufacturing change were to be made. What course of action would you recommend that management take?

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Joint Costs Materials Labor $120,000 80,000 Overhead 60,000 Production Kelton Yelon 6,000 pounds. Sales price, $42 per pound; additional costs to package and sell, $7 per pound. 4,000 pounds. Sales price, $40 per pound; additional costs to package and sell, $4 per pound.