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A company produces three different produces frm a joint process. Each product can be sold at the split-off point as follows: Product A Product B

A company produces three different produces frm a joint process. Each product can be sold at the split-off
point as follows:
Product A Product B Product C
Number of units 1000 500 250
Selling prices per unit $ 30 $ 25 $ 30
The company is considering processing Product B further and selling it for $40 per unit. The additional
processing could be done within the exisiting facilities of the company. The total additional costs
of processing it further include direct labor of $4000 and direct material of $2000.
Should product B be processed furhter?
No, as total profits will decrease by 8500
No, as total profits will decrease by 3500
Yes, as total profits will increase by 1500
yes, as total profits will increase by 9000

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