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Bostitch Inc. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per

Bostitch Inc. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $75,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:

Product

Selling Price

Quarterly Output

A

$

4

per pound

10,000

pounds

B

$

7

per pound

22,000

pounds

C

$

11

per gallon

5,000

gallons

Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below:

Product

Additional Processing Costs

Selling Price

A

$

53,000

$

7

per pound

B

$

38,000

$

12

per pound

C

$

18,000

$

18

per gallon

Which products should be processed further?

  • -A and B
  • -B and C

  • -A and C

  • -A, B, and C

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