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Jay Co Ltd, currently makes two kinds of string: Speed and Power. To make these, nylon is purchased, then either the speed or Power blend
Jay Co Ltd, currently makes two kinds of string: Speed and Power. To make these, nylon is purchased, then either the speed or Power blend is woven in. Currently, management has been selling the speed and Power strings as is, but is considering further processing to create a Speed Plus and a Power Plus, which adds a hybrid element to the string. Information about each follows: Speed Power Selling Price 45 per pack 45 per pack Annual Output 32,000 packs 35,000 packs Given the nature of the strings, the costs to process the string are very similar, but there is a difference in the selling price, given the current market for tennis string Speed Plus Power Plus Selling Price 55 per pack 55 per pack $ Is Additional Processing Costs 305,000 per year 360,000 per year Which product(s) should be sold at the split-off point and which should be processed further? Show computations (Calculations) Should Speed be further processed to make Speed Plus? Should Power be further processed to make Power Plus? K-Select Yes or No) K-Select Yes or No) Explain
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