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Joyous Julius, Inc., is a large retail chain that has grown quickly thanks to its successful leveraging of homemade-style orange julius. The company would
Joyous Julius, Inc., is a large retail chain that has grown quickly thanks to its successful leveraging of homemade-style orange julius. The company would like to narrow down the number of flavors it offers to three. Joyous Julius, Inc., currently produces six different flavors of orange julius: pure orange, raspberry orange, mango orange, strawberry orange, tropical orange, and coconut orange. The orange julius flavors are produced jointly in a mixing process that costs a total of $2,500 per batch. At the end of each joint production batch, 900 cups of pure orange Julius are produced. Another 1,180 cups of various Julius flavors are processed further. Information about the production of each batch is summarized in the following table: Market Value Market Price Orange Julius Flavor Cups per Batch per Cup at Split-Off per Cup After Further Added Cost Processing per Cup Pure orange 900 $3.00 $3.00 $0.00 Raspberry orange 500 3.00 3.35 0.15 Mango orange 300 3.00 3.30 0.10 Strawberry orange 150 3.00 3.30 0.20 Tropical orange 130 3.00 3.10 Coconut orange 100 3.00 3.25 0.40 0.65 One of the by-products of the production of the orange julius is orange peels. Joyous Julius, Inc. has found a company that produces nutritional smoothies that would be willing to buy Joyous Julius's orange peels for $40 per batch. Joyous Julius, Inc., is interested in the deal but doesn't know how to account for these additional revenues. a. With the given information identify the flavors that should not be processed beyond the split-off point. a. Tropical and coconut orange b. Pure orange and raspberry orange c. Mango orange d. Strawberry orange
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