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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
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 processed 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 Product Sea Teal Sea Pastel Pounds Produced Sales Value at Final Sales Additional Split-Off 9,000 $ 50,000 4,500 Sea Powder 2,000 80,800 70,000 Value $ 90,000 160,000 85,000 Cost $ 35,000 50,000 14,000 Required: a-1. Compute the Incremental benefit (cost) of further processing to these products. a-2. Which products should Kelp process beyond the split-off point? b. What is the selling price per pound of Sea Paste at the split-off point at which the company is Indifferent? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B What is the selling price per pound of Sea Paste at the split-off point at which the company is indifferent? (Round your final answer to 2 decimal places.) Minimum price per pound < Req A2 Req B >
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