Question
Center Company currently produces three products from a joint process. The joint process has total costs of $512,000 per month. All three products, A, B
Center Company currently produces three products from a joint process. The joint process has total costs of $512,000 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 | 4,400 | $ | 15 | $ | 16 | $ | 2.00 | |||||||
B | 17,900 | $ | 21 | $ | 24 | $ | 2.50 | |||||||
C | 10,400 | $ | 24 | $ | 31 | $ | 3.00 | |||||||
|
a-1. Should Product A be sold immediately or sold after processing further?
Sell Now | |
Sell Later |
a-2. How much will the decision affect profit? b-1. Should Product B be sold immediately or sold after processing further?
Sell Now | |
Sell Later |
b-2. How much will the decision affect profit? c-1. Should Product C be sold immediately or sold after processing further?
Sell Now | |
Sell Later |
c-2. How much will the decision affect profit?
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