Question
Hommie Delicacies produces two products (Orapine and Banango) from a joint process. The joint cost of production is GH80,000. Five thousand units of Orapine can
Hommie Delicacies produces two products (Orapine and Banango) from a joint process. The joint cost of production is GH80,000. Five thousand units of Orapine can be sold at split-off for GH20 per unit or processed further at an additional cost of GH20,000 and sold for GH25 per unit. Ten thousand units of Banango can be sold at split-off for GH15 per unit or processed further at an additional cost of GH20,000 and sold for GH16 per unit.WhatisthedifferenceinprofitforeachoftheproductsifHommiedecidestoprocessfurtherOrapineandBanangoinsteadofsellingitatsplit-off?WhatadvisewillyougivetoHommie?
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