Two products,IF and RI,emerge from a joint process.Product IF has been allocated $25,300 of the total joint costs of $46,000.A total of 2,000 units of product IF are produced from the joint process.Product IF can be sold at the split-off point for $11 per unit,or it can be processed further for an additional total cost of $10,000 and then sold for $13 per unit.If product IF is processed further and sold,what would be the effect on the overall profit of the company compared with sale in its unprocessed form directly after the split-off point?
A)$31,300 less profit
B)$6,000 less profit
C)$16,000 more profit
D)$19,300 more profit

Question

Quizplus · Accepted Answer

If processed further, the additional revenue is ($13 - $11) * 2,000 = $4,000, but the additional cost is $10,000, resulting in a $6,000 decrease in profit.

Two Products,IF and RI,emerge from a Joint Process