108. A company puts four products through a common production process. This process costs $100,000 each year. The four products can be sold when they emerge from this process at the "split-off point", or processed further and then sold. Data about the four products for the coming period are:
Unit Sales
Price per
Pound
Additional
at Split-Off
after Further
Processing
Product
Volume
Costs
Singer
20,000 lb.
$28.00
$42.00
$400,000
Talker
10,000 lb.
7.00
28.00
144,000
Walker
5,000 lb.
36.00
58.00
120,000
Sayer
18.00
22.00
40,000
Determine which products should be sold at the split-off point and which should be processed further.
109. A company processes chemicals through a common production process. This process costs $200,000 each year. The four chemicals can be sold when they emerge from this process at the "split-off point," or processed further and then sold. Data about the four products for the coming period are:
Gallon
Gallon after Further
A
25,000 g.
$35.00
$54.00
$500,000
B
12,000 g.
12.00
124,000
C
8,000 g.
54.00
D
2,000 g.
21.00
25,000
a. Calculate the incremental profit or loss that would be generated by processing these chemicals further.
b. Which chemicals should be sold as is and which should be processed further and why?
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