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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?

  • Sell Now

  • Sell Later

a-2. How much will the decision affect profit?

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