Question
Payne Company makes two drugs, Moxi and Nedacil, in a joint process. At the split-off point, 18000 units of Moxi and 38000 units of Nedacil
Payne Company makes two drugs, Moxi and Nedacil, in a joint process. At the split-off point, 18000 units of Moxi and 38000 units of Nedacil are available each month. Monthly joint production costs are $106400. Payne allocates the joint costs based on number of units produced. Moxi can be sold at the split-off point for $8.50 per unit. Nedacil can either be sold at the split-off point for $7.40 per unit or it can be processed further into Nedafenatol and sold for $12.80 per unit. To make the Nedafenatol, additional processing costs of $4.60 per unit will be incurred. If Nedacil is processed further (into Nedafenatol) then sold, rather than being sold as Nedacil, by how much would monthly operating income change? Give me the amount with a negative sign if income would decrease. Input just the amount if income would increase. Input 0 if income would not change. (Round any per unit amounts in intermediary computations and final answers to the nearest penny, when needed.) What would the selling price per unit of Nedafenatol need to be in order for Payne Company to be economically indifferent between selling Nedacil or Nedafenatol?(Round your answer to the nearest penny.)
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