General Chemical Company (GCC) manufactures two products as part of a joint process: A1 and B1. Joint costs up to the split-off point total $20,000. The joint costs are allocated to A1 and B1 in proportion to their relative sales values. At the split-off point, product A1 can be sold for $30,300, whereas product B1 can be sold for $70,700. Product A1 can be processed further to make product A2, at an incremental cost of $36,000. A2 can be sold for $83,000. Product B1 can be processed further to make product B2, at an incremental cost of $46,000. B2 can be sold for $93,000.

Joint costs allocated to product A1 total: -6000 -14000 -10000 -20000

Joint costs allocated to product B1 total: -6000 -14000 -10000 -20000 The net change in operating income resulting from a decision to manufacture product A2 is: -52700increase -16700decrease -16700increase -36000increase