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Legacy Company currently produces three products from a joint process. The joint process has total costs of $210,000 per month. All three products, A, B
Legacy Company currently produces three products from a joint process. The joint process has total costs of $210,000 per month. All three products, A, B & C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available:
Units | Immediate Sales Price | Later Sales Price | Unit Cost of Further Processing | |||||||||||
A | 46,000 | $ | 6 | $ | 9 | $ | 7 | |||||||
B | 92,000 | $ | 8 | $ | 14 | $ | 5 | |||||||
C | 138,000 | $ | 9 | $ | 14 | $ | 6 | |||||||
a-1. Should Product A be sold immediately or sold after processing further?
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Sell Now
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Sell Later
a-2. How much will the decision affect profit?
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