A firm produces two joint products. Product M can be sold at the split-off points for $160 or it could be processed further at an incremental cost of $50 and then sold for $200. Product N can be sold at the split-off point for $100 or it could be processed further at an incremental cost of $40 and then sold for $190. The best decision is:

		Sell product M at the split-off point but do not sell N at the split-off point.
		Do not sell M at the split-off point and sell N at the split-off point.
		Sell product M and N at the split-off point.
		Do not sell both M and N at the split-off point.

The firm has two products, M and N. M requires 4 machine hours and N requires 2 machine hours. The firm has a demand for 2,000 units of M and a demand for 2,000 units of N. The contribution margin per unit is $40 for M and $30 for N. If the firm does not have enough machine hours to produce enough of products M and N to meet demand, then the firm should begin with the production of Product M.

True

False