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In a joint process, 20,000 gallons of A is processed into 14,000 gallons of B and 6,000 gallons of C. The joint process costs are
In a joint process, 20,000 gallons of A is processed into 14,000 gallons of B and 6,000 gallons of C. The joint process costs are $38,000. Given the following data, should B be processed further, and why or why not? C Allocated joint process costs $ 26,600 $11,400 Sales price per gallon at split-off point $ 0.85 $ 1.25 Variable cost to process further $52,000 $ 6,600 Sales price per gallon after further processing $ 4.60 $ 2.20 Multiple Choice O No, B should not be processed further because the net loss is $14,200. O O No, B should not be processed further because the net loss is $2,300. O Yes, B should be processed further because the net benefit is $12,400. O Yes, B should be processed further because the net benefit is $24,300. O None of the answers is correct
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