D Question 4 Earthworks Co. produces three products from a common raw material. The joint costs for a typical year are as follows: Direct material $40,000 Direct labor 45,000 Variable manufacturing overhead 20,000 The annual revenues from each product are as follows: ProductX Product Y Product z $60,000 70,000 30,000 Management is considering processing Product Z beyond the split off point, which would increase the value of Product Z to $57.000. To process Product further Earthworks must rent processing facilities at an annual cost of $17.500 and will incur additional labor of $5.500. What will be the effect on annual operating income of Earthworks decides to process Product further O $34,000 incremental income 0 $4,000 Incremental income $14.312.50 incremental income $23,000 incremental loss Previous