Question
Jones Company produces two products, A and C, at a cost of $150,000 in a joint process. The production process yields 20,000 pounds of product
Jones Company produces two products, A and C, at a cost of $150,000 in a joint process. The production process yields 20,000 pounds of product A and 15,000 pounds of product C. Both product A and C are saleable at the split-off point for $20 per pound and $15 per pound, respectively. Product A can be processed further at an additional cost of $160,000 to produce product B which would sell for $30 per pound. Product C can be processed further at an additional cost of $50,000 to produce product D which would sell for $18 per pound. Which of the products should be processed further?
A. | product C only | |
B. | both product A and product C | |
C. | neither product A and product C | |
D. | product A only |
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