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 Pounds Produced Sales Value at Split-Off Final Sales Value Additional Cost

Sea Tea 9,000 $60,000 $90,000 $35,000 Sea Paste 5, 800 75,800 160,000 50,000

Sea Powder 2,000 70,000 85,000 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? (Round your final answer to 2 decimal places)