A commitee has started selling gluten free cigars and chewing tobacco from a joint process involving the processing of tobacco leaves.

Joint costs are $60,000 for this process and yields 2000 pounds of cigars and 4,000 pounds of chewing tobacco.

Cigars sell for $80/pound and chewing tobacco sells for $20/pound. Cigars require $80,000 in spearable costs while chewing tobacco requires $50,000 in separable costs.

Chewing tobacco can be processed further for $28,000 of additional separable costs into a mint flavored premium chewing tobacco that would sell for $30.50/pound.

a) If the commitee process chewing tobacco into the mint flavored premium chewing tobacco, will profit increase or decrease and by how much?

b) What is the maximum amount that joint costs can increase before it would not be better to process chewinh tobacco further into premium chewing tobacco?