A company spent $750,000 to produce 225,000 gallons of a chemical free cleaning product that can be sold for $6.00 per gallon. This product can be further processed into a household cleaning solution that can be sold for $8.50 per gallon. It will cost $360,000 to process the chemical free product into the household cleaning solution.

1. what is differential analysis to determine if the product should be processed further.

(12 marks)

1. Discuss the results. (5 marks)
2. Define joint cost. (3 marks)
3. Should joint costs be considered in the decision to sell or further process the product? Explain your answer. (5 marks)