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The El Paso Chemical Company produces two chemicals whose production begins with a joint process. Additional data for the chemicals are presented below: Chemical X
The El Paso Chemical Company produces two chemicals whose production begins with a joint process. Additional data for the chemicals are presented below:
Chemical X | Chemical Z | |
Unit selling price at split-off | $38 per gallon | $15 per gallon |
Unit selling price after further processing | $65 per gallon | $18 per gallon |
Additional costs to process beyond split-off | $20 per gallon | $20 per gallon |
What should you do?
A) Chemical X Chemical Z
Sell at split-off Process Further
B) Chemical X Chemical Z
Process further Sell at split-off
C) Chemical X Chemical Z
Process further Process further
D) Chemical X Chemical Z
Sell at split-off Sell at split-off
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