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ABC Corporation manufactures three products from a joint process. The three products are in industrial-grade form at the split-off point. They can either be sold

ABC Corporation manufactures three products 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 process are as follows:

Product A product B Product C

Sales price at split off point $16 $12 $5

Allocated joint costs $6,000 $6,000 $6,000

Sales Price after further processing $20 $18 $14

Cost of Further processing $6,830 $2590 $2110

Product Quantity 1000lb 1000lb 1000lb

What would be the additional amount of profit that ABC corporation would gain from further processing the product that is more profitable to process further rather then be sold at the split off point?

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