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#9. The Big Three Corporation manufactures three products (LUC, PLA, and JOS) from a joint process. The three products are in industrial grade form at
#9. The Big Three Corporation manufactures three products (LUC, PLA, and JOS) from a joint process. The three products are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this production process is as follows: Sales Price at split-off point LUC $16 $6,000 $20 $2,000 PLA $12 $6,000 Allocated joint costs JOS $5 $6,000 $9 $5,000 1,000 lb. Sales Price after further processing Cost of further processing Product Quantity $18 $3,000 1,000 lb. 1,000 lb For which product(s) above would it be more profitable for The Big Three Corp. to process further rather than sell at the split-off point? a) Jos only b) PLA and Jos only c) LUC and PLA only d) All three e) None
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