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Kelp Company produces threejoint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these

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Kelp Company produces threejoint 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 Pounds Sales Value at Final Sales Additional Product Produced Split-Off Value Cost Sea Tea 9,000 $60,000 $ 90,000 $35,000 Sea Paste 6,200 86,100 160,000 50,000 Sea Powder 2,000 70,000 85,000 14,000 ' Required: a-1. Compute the incremental benet (cost) of further processing to these products. a-2. Which products should Kelp process beyond the split-off point? 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

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