The Carter Corporation makes products A and B in a joint process from a single input, R.
Question:
The Carter Corporation makes products A and B in a joint process from a single input, R. During a typical production run, 50,000 units of R yield 20,000 units of A and 30,000 units of B at the split-off point. Joint production costs total $90,000 per production run. The unit selling price for A is $4.00 and for B is $3.80 at the split-off point However, B can be processed further at a total cost of $60,000 and then sold for $7.00 per unit.
In a decision between selling B at the split-off point or processing B further, which of the following items is not relevant:
a. The $60.000 cost to process B beyond the split-off point
b. The $3.80 unit sales price of B at the split-off point.
c. The portion of the $90.000 joint production cost allocated to B.
d. The $7 units selling price B after further processing.
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich