Question
Fine Pottery Processors manufactures two products, platters and tureens, from a joint process. Platters are allocated $5000 of the total joint costs of $26477. There
Fine Pottery Processors manufactures two products, platters and tureens, from a joint process. Platters are allocated $5000 of the total joint costs of $26477. There are 1,500 platters produced and 1,500 tureens produced each year. Platters can be sold at the split-off point for $11 per unit, or they can be processed further into a deluxe platter for additional processing costs of $4930 and sold for $16 for each deluxe platter.
What is the difference in operating income by processing the platters further versus selling them off at the split off point?
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