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:

-Product L
A) should be processed further to increase profits by $130,000.
B) should be sold at split-off since processing further would only reduce profits by $130,000.
C) should be processed further to increase profits by $380,000.
D) can be processed further or sold at split-off. There is no difference in profit.

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:
 
-Product L
A) should be processed further to increase profits by $130,000. 
B) should be sold at split-off since processing further would only reduce profits by $130,000. 
C) should be processed further to increase profits by $380,000. 
D) can be processed further or sold at split-off. There is no difference in profit.

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:
 
-Product L
A) should be processed further to increase profits by $130,000. 
B) should be sold at split-off since processing further would only reduce profits by $130,000. 
C) should be processed further to increase profits by $380,000. 
D) can be processed further or sold at split-off. There is no difference in profit.

Avey Corporation Has a Joint Process Which Produces Three Products