From a particular joint process, Edgerton company produces three products, A, B, and C. Each product may be sold at the point of split-off or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. In 2011, all three products were processed beyond split-off. Joint production costs for the year were $72,000. Sales values and costs needed to evaluate Edgerton’s 2011 production policy follow. 

Answer the following multiple-choice questions: 

1. For units of C, the unit production cost most relevant to a sell-orprocess-further decision is (a) $5, (b) $12, (c) $4, (d) $9.

 2. To maximize profits, Edgerton should subject the following products to additional processing: (a) A only, (b) A, B, and C, (c) B and C only, (d) C only.

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Additional Costs and Sales Values If Processed Further Net Realizable Values (Sales Values) at Sales Values Added Costs Units Produced Product Split-off $25,000 41,000 $42,000 45,000 $ 9,000 A 6,000 4,000 2,000 B 7,000 10,000 32,000 24,000