Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:

-Once product M is produced, processing it further will cause profits to
A) increase by $160,000.
B) decrease by $ 80,000.
C) decrease by $160,000.
D) increase by $ 80,000.

Question

Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:
 
-Once product M is produced, processing it further will cause profits to
A) increase by $160,000. 
B) decrease by $ 80,000. 
C) decrease by $160,000. 
D) increase by $ 80,000.

Quizplus · Accepted Answer

The Answer of Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:
 
-Once product M is produced, processing it further will cause profits to
A) increase by $160,000. 
B) decrease by $ 80,000. 
C) decrease by $160,000. 
D) increase by $ 80,000.

Avey Corporation Has a Joint Process Which Produces Three Products