Knight, Inc. produces three products using a joint process which requires $115,000 in joint costs. The products A, B and C can be sold at split-off or processed further and then sold. The production level for each product is 8,000 units. The following unit information is also available: Required:
a. Which products should be processed further?
b. Processing each product further will have what effect on profits?

Question

Knight, Inc. produces three products using a joint process which requires $115,000 in joint costs. The products A, B and C can be sold at split-off or processed further and then sold. The production level for each product is 8,000 units. The following unit information is also available:  Required:
a. Which products should be processed further?
b. Processing each product further will have what effect on profits?

Quizplus · Accepted Answer

The Answer of Knight, Inc. produces three products using a joint process which requires $115,000 in joint costs. The products A, B and C can be sold at split-off or processed further and then sold. The production level for each product is 8,000 units. The following unit information is also available:  Required:
a. Which products should be processed further?
b. Processing each product further will have what effect on profits?