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Lido Co. manufactures A and B from a joint process with a cost of $80,000. 5,000 pounds of A can be sold at split-off for
Lido Co. manufactures A and B from a joint process with a cost of $80,000. 5,000 pounds of A can be sold at split-off for $20 per pound or processed further at additional cost of $20,000 and then sold for $25. 10,000 pounds of B can be sold at split-off for $15 per pound or processed further at an additional cost of $20,000 and later sold for $16. If Lido decides to process B beyond the split-off point, will Lidos operating income increase or decrease? By how much?
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