Question
E11-23 Sell or process further: Bright Red Cannery makes three products from a single joint process. For the year, the cannery processed all three products
E11-23 Sell or process further: Bright Red Cannery makes three products from a single joint process. For the year, the cannery processed all three products beyond split-off. The following data were generated for the year:
Joint Product Incremental Separate Cost total revenue
Candied Apple 26,000 690,000
Apple Jelly 32,000 775,000
Apple Jams 15,000 271,000
Analysis of market data reveals that candied apples, apple jelly, and apple jam could have been sold split-off for $670,000, $730,000, and $260,000, respectively.
a.Based on hindsight, evaluate managements production decisions.
b. How much additional prot could the company have generated if it had made optimal decisions at spilled-off? Explain why do you pick the product you pick as the optimal decision?
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