$($Prepared from a situation suggested by Professor John W$.$ Hardy.$)$ Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T$-$bone steak on hand, and it is trying to decide whether to sell the T$-$bone steaks as they are initially cut or to process them further into filet mignon and the New York cut.

If the T$-$bone steaks are sold as initially cut, the company figures that a $1-$pound T$-$bone steak would yield the following profit:

Selling price $($$$2\mathrm{.}10$ per pound$)$ $ $2\mathrm{.}10$

Less joint costs incurred up to the split$-$off point where T$-$bone steak can be identified as a separate product $1\mathrm{.}50$

Profit per pound $ $0\mathrm{.}60$