Use the following to answer questions:
SimpsonSpring Corporation manufactures products J, K and L from a joint process. Additional information is as follows:

Total joint costs of $120,000 were incurred on the three products
-Product J should be:
A) Sold at split-off
B) Processed further for an additional profit of $6,000
C) Dropped from the product line because it shows an overall loss
D) Processed further for an additional profit of $126,000

Question

Use the following to answer questions:
SimpsonSpring Corporation manufactures products J, K and L from a joint process. Additional information is as follows:
  
Total joint costs of $120,000 were incurred on the three products
-Product J should be:
A) Sold at split-off 
B) Processed further for an additional profit of $6,000 
C) Dropped from the product line because it shows an overall loss 
D) Processed further for an additional profit of $126,000

Quizplus · Accepted Answer

The correct choice is to process Product J further for an additional profit of $6,000. This suggests that the incremental revenue from processing the product further exceeds the incremental costs by $6,000, making further processing financially beneficial.

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