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Volcanic Enterprises manufactures Lava and Pumice from a joint process (cost =$80,000). Five thousand kg of Lava can be sold at split-off for $20 per
Volcanic Enterprises manufactures Lava and Pumice from a joint process (cost =$80,000). Five thousand kg of Lava can be sold at split-off for $20 per kg. or processed further at an additional cost of $20,000 and then sold for $25 per kg. Ten thousand kg. of Pumice can be sold at split-off for $35 per kg. or processed further at an additional cost of $29,000 and sold for $59 per kg. If Volcanic decides to process Lava beyond the split-off point, income will: a. Decrease by $5,000 b. No change c. Increase by $10,000 d. Increase by $5,000 e. Decrease by $10,000
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