(Solved):Georgia Manufacturing Company produces products A, B, C, and D through a joint process. The joint…

 

Question

Georgia Manufacturing Company produces products A, B, C, and D through a joint process.

The joint costs amount to $250,000.

Product Units Produced Sales Value at Split-Off Additional Costs of Processing Sales Value After Processing
A 1,500 $20,000 $5,000 $30,000
B 2,500 $60,000 $6,000 $70,000
C 2,000 $40,000 $8,000 $50,000
D 3,000 $80,000 $12,000 $90,000

If A is processed further, profits of A will:

a) Decrease by $45,000

b) Increase by $10,000

c) Increase by $25,000

d) Increase by $5,000

 

EXPERT ANSWER

Answer: d) Increase by $5,000

Explanation:

The effect on profits of A if it will be processed further

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