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eep or drop Conway. on profit that would result from dropping Exercise 13-20 Sell at Split-Off or Process Further Chirp Inc. manufactures two products

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eep or drop Conway. on profit that would result from dropping Exercise 13-20 Sell at Split-Off or Process Further Chirp Inc. manufactures two products from a joint production process. The joint process costs $150,000 and yields 10,000 kilograms of PEROX compound and 32.000 kilograms of EPTOL compound. PEROX can be sold at split-off for $40 per kilogram. EPTOL can be sold at split-off for $6 per kilogram. A buyer of EPTOL asked Chirp Inc. to process EPTOL further into CHLOR compound. If EPTOL were processed further, it would cost $205,000 to turn 32,000 kilograms of EPTOL into 9,000 kilograms of CHLOR. The CHLOR would sell for $60 per kilogram. Required: OB CP 1. What is the contribution to income from selling the 32,000 kilograms of EPTOL at split-off? 2. CONCEPTUAL CONNECTION What is the contribution to income from processing the 32,000 kilograms of EPTOL into 9,000 kilograms of CHLOR? Should Chirp Inc. continue to sell the EPTOL at split-off or process it further into CHLOR? the mal Product Mix with d Resource

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