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Question # 2 Mediterranean Olive Co . produces olive oil. It costs $ 4 per pound to process the olives into olive oil. Olive pulp

Question #2
Mediterranean Olive Co. produces olive oil. It costs $4 per pound to process the olives into olive oil. Olive pulp is a by-product of the manufacturing process. They can sell the olive pulp or process it further.
Mediterranean Olive Co. can chemically process the olive pulp to make pomace olive oil. They can produce 10,000 ounces of pomace olive oil per harvest for additional processing costs of $4,200. They can sell the pomace olive oil for $1.50 per ounce.
Instead of processing the olive pulp, Mediterranean Olive Co. can sell it to a local company to make fuel. The local company offered $9,000 for the entire batch of olive pulp left over from the manufacturing process each harvest.
The cost of processing the olive pulp into pomace oil is:
A joint cost that is not relevant to the decision to process the olive pulp further
Not a joint cost but not relevant to the decision to process the olive pulp further
A joint cost that is relevant to the decision to process the olive pulp further
Not a joint cost but relevant to the decision to process the olive pulp further
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