The Evangeline Company makes two products, X and Y, from a common input, Z. In March, Evangeline used 30,000 pounds of Z to make 20,000 pounds of X and 10,000 pounds of Y. The cost of Z was $1.00 per pound and X and Y can be sold for $7.50 and $10.00, respectively; Evangeline incurred additional processing costs of $30,000 to further process X and $20,000 to further process Y. If Evangeline could sell X for $6.25 per pound at the split-off point, should the company process X further or sell X at the split-off point and what is the difference in profit?

Multiple Choice

A None of these.

B Process further, $5,000

C Sell at the split-off point, $5,000

D Sell at the split-off point, $10,000

E Process further, $10,000