BOB Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold at the split-off point or be processed further. If they are processed further, the resulting products can be sold as delicacies to health food stores. Cost and revenue information is as follows: Sales Value and Additional Costs if Produced Further Pounds Produced Sales Value at Split-Off Final Sales Value Additional Cost Product Sea Tea 9,000 Sea Paste 4,800 $60,000 71,100 $90,000 $35,000 160,000 50,000 Sea Powder 2,000 70,000 85,000 14,000 Compute the incremental benefit (cost) of further processing to these products.
BOB Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold at the split-off point or be processed further. If they are processed further, the resulting products can be sold as delicacies to health food stores. Cost and revenue information is as follows: Sales Value and Additional Costs if Produced Further Pounds Produced Sales Value at Split-Off Final Sales Value Additional Cost Product Sea Tea 9,000 Sea Paste 4,800 $60,000 71,100 $90,000 $35,000 160,000 50,000 Sea Powder 2,000 70,000 85,000 14,000 Compute the incremental benefit (cost) of further processing to these products.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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BOB COMPANY PRODUCED 3 JOINT PRODUCTS
Transcribed Image Text:BOB Company produces three joint products from seaweed. At the split-off point, three basic
products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold
at the split-off point or be processed further. If they are processed further, the resulting products
can be sold as delicacies to health food stores. Cost and revenue information is as follows:
Sales Value and Additional Costs if Produced Further
Pounds Produced Sales Value at Split-Off Final Sales Value Additional Cost
Product
Sea Tea
9,000
Sea Paste
4,800
$60,000
71,100
$90,000
$35,000
160,000
50,000
Sea Powder 2,000
70,000
85,000
14,000
Compute the incremental benefit (cost) of further processing to these products.
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