The Freed Company produces three products, X, Y, Z, from a single raw material input. Product Y can be sold at the splitoff point for total revenues of $50,000, or it can be processed further at a total cost of $16,000 and then sold for $68,000. Product Y:

	1.	should be sold at the split-off point, rather than processed further.
	2.	would increase the company's overall net operating income by $18,000 if processed further and then sold.
	3.	would increase the company's overall net operating income by $68,000 if processed further and then sold.
	4.	would increase the company's overall net operating income by $2,000 if processed further and then sold.