Units produced 12,000 8,000 4,000 24,000 Joint costs $144,000 $60,000 $36,000 $240,000 Sales value before additional processing 240,000 100,000 60,000 400,000 Additional costs for further processing 28,000 20,000 12,000 60,000 Sales value if processed further 280,000 120,000 70,000 470,000

further processing Sales value if processed further 280,000 120,000 70,000 Difference = -$240,000 - $28,000 + $280,000=$12,000 = -$100,000 - $20,000 + $120,000 =$0 = -$60,000 - $12,000 + $70,000 =$(2,000) Deaton Corporation should process further with product A as there is a potential profit of $12,000. The company is indifferent about the further processing for product B, and further processing product C will result in a loss of $2,000