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Center Company currently produces three products from a joint process. The joint process has total costs of $507,000 per month. All three products, A, B
Center Company currently produces three products from a joint process. The joint process has total costs of $507,000 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 | 4,350 | $ | 16 | $ | 17 | $ | 2.00 |
B | 17,850 | $ | 20 | $ | 25 | $ | 4.00 |
C | 10,350 | $ | 27 | $ | 30 | $ | 2.00 |
a-1. | Should Product A be sold immediately or sold after processing further? |
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a-2. | How much will the decision affect profit? |
b-1. | Should Product B be sold immediately or sold after processing further? |
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b-2. | How much will the decision affect profit? |
c-1. | Should Product C be sold immediately or sold after processing further? |
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c-2. | How much will the decision affect profit? |
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