Fett Corporation has a joint process that produces three products: I, G and 88. Each product may be sold at split-off or processed further and then sold. Joint-processing costs for a year amount to $20,000.

(a) Which product(s), if any should the company process beyond the split-off point? Which, if any, should they sell at the split-off point?

(b) Suppose the company currently sells all products at the split-off point. What would be the change in net operating income if the company chose the optimal sales-at-split-off vs. sales-after-processing combination?

Product Sales Value at Split-Off $32,000 16,500 6,400 Separable Processing Costs after Split-Off $5,000 7,500 8,000 Sales Value at Completion $39,000 29,000 10,000 G 88