Question
Acme Company currently produces three products from a joint process. The joint process has total costs of $250,000 per month. All three products, A, B
Acme Company currently produces three products from a joint process. The joint process has total costs of $250,000 per month. All three products, A, B & C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available:
|
| Units | Immediate Sales Price | Later Sales Price | Unit Cost of Further Processing |
| A | 50,000 | $5 | $10 | $6 |
| B | 75,000 | $10 | $15 | $4 |
| C | 100,000 | $15 | $20 | $3 |
Which of the products should be sold after further processing?
| a. | Product B only | |
| b. | Product A only | |
| c. | Products B and C | |
| d. | Products A and C |
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