Question
Bergamit Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicalsdac and tyl. One batch of 10,000 gallons of dactylyte
Bergamit Company manufactures veterinary products. One joint process involves refining a chemical (dactylyte) into two chemicalsdac and tyl. One batch of 10,000 gallons of dactylyte can be converted to 4,000 gallons of dac and 6,000 gallons of tyl at a total joint processing cost of $15,000. At the split-off point, dac can be sold for $5 per gallon and tyl can be sold for $7 per gallon. Bergamit has just learned of a new process to convert dac into prodac. The new process costs $5,000 and yields 2,500 gallons of prodac for every 3,000 gallons of dac. Prodac sells for $6 per gallon.
What is Bergamit's profit from refining one batch of dactylyte if both dac and tyl are sold at the split-off point?
a.$36,000
b.$25,000
c.$17,000
d.$47,000
e.$52,000
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