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Kelp Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of
Kelp Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold at the split-off point or be processed further. If they are processec further, the resulting products can be sold as delicacies to health food stores. Cost and revenue information is as follows Sales Value and Additional Costs If Processed Further Final SalesAdditional Pounds Value at Value Cost Product Sea Tea Sea Paste Sea Powder 2,000 70,000 85,000 14,000 Produced Split-Off $ 60,000 s 90,000 9,000 35,000 6,600 78,900 160,000 50,000 Instructions a-1. Compute the incremental benefit (cost) of further processing to these products (Negative amounts should be shown with a minus sign.) Sea Tea Sea Paste Sea Powder Incremental benefit (cost) a-2. Which products should Kelp process beyond the split-off point? Sea paste and sea powder Sea tea and sea powder Sea tea and sea paste b. At what price per pound would it be advantageous for Kelp Company to sell Sea Paste at the split-off point rather than process it further? (Round your intermediate calculations and final answer to 2 decimal places.) Minimum price per pound
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