39 Synesthor Company harvests and processes almonds into three products:candied almonds, almond butter, and almond flour. The joint production costfor harvesting one ton of almonds is $500. The selling price of the Synesthor'sthree products are as follows:• Candied almonds: $1.00 per poundAlmond butter: $5.00 per 40-pound bag•Almond flour: $14 per tonA new investor in Synesthor Company thinks that the company is losing moneywhenever it sells almond flour and has called for dropping this product fromthe product line. The controller of Synesthor Company has calculated that theextra processing cost (beyond the joint production costs) for almond flour is $8per ton. Synesthor Company is currently selling 1,000 tons of almond flour peryear.How much would Synesthor Company's net income change if it were to stopselling almond flour?It would increase by $6,000It would decrease by $6,000It would increase by $14,000It would decrease by $14,000

Step 1:In decision making we consider only relevant cost. Here in given question joint cost of $500…

Answered: 39 Synesthor Company harvests and…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 86IIP

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