Presley produces three products from a joint process. The joint process has total costs of $500,000 per month. All three products, A, B, C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available: Units Immediate Sales Price Later Sales Prices Unit cost of Further Processing 1 5,000 $15 $20 $6 2 17,500 $20 $25 $4 3 10,000 $25 $32 $3 What is the total benefit the company would experience by following your recommendations vs. not processing any further? Hint: Give the sum of the benefits from each product you have chosen to process further.
Presley produces three products from a joint process. The joint process has total costs of $500,000 per month. All three products, A, B, C, are immediately saleable as they come out of the joint process. Alternatively, any of the products could continue on with additional processing and be sold as a more complete product. The following information is available:
Units Immediate Sales Price Later Sales Prices Unit cost of Further Processing
1 5,000 $15 $20 $6
2 17,500 $20 $25 $4
3 10,000 $25 $32 $3
What is the total benefit the company would experience by following your recommendations vs. not processing any further? Hint: Give the sum of the benefits from each product you have chosen to process further.
Step by step
Solved in 4 steps
