The Jim Company produces three products, A, B, and C, from a joint process. Joint production costs for the year were $120,000. Product A may be sold at the split-off point or processed further. The additional processing requires no special facilities, and all additional processing costs are variable. Sales values and cost needed to evaluate the companys production policy regarding product A is below:

		Additional Cost and Sales Value after Further Processing
Units Produced	Sales Value at Split-Off	Sales	Cost
3,000	$60,000	$90,000	$25,000

Should product A be sold at the split-off point or processed further?

Select one:

a. Yes, processing should continue resulting in an incremental profit of $5,000.

b. Yes, processing should continue resulting in an incremental profit of $30,000.

c. No, if processing continues, profit will drop from $60,000 to $35,000.

d. No, if processing continues, profit will drop by $30,000 ($90,000 less $120,000).