Products Volume at split-off (in kilograms) Separable processing costs Volume after additional Revenue per processing (in kilogram kilograms) GreenBoost 350,000 $6 OrganicHarvest¹ 100,000 BioGrow² 50,000 $240,000 50,000 $100,000 75,000 $12 $10 David is unsure whether he should continue to produce the three products, or whether it would be more beneficial to focus just on the GreenBoost product. Right now, David is tracking profitability using the following format: Revenues - GreenBoost ($6 x 350,000 kg) Revenues - OrganicHarvest ($12 x 50,000 kg) Revenues - BioGrow ($10 x 75,000) Total revenues Total costs (joint and separable) Profit $2,100,000 600,000 750,000 3,450,000 (1,360,000) $2,090,000
Products Volume at split-off (in kilograms) Separable processing costs Volume after additional Revenue per processing (in kilogram kilograms) GreenBoost 350,000 $6 OrganicHarvest¹ 100,000 BioGrow² 50,000 $240,000 50,000 $100,000 75,000 $12 $10 David is unsure whether he should continue to produce the three products, or whether it would be more beneficial to focus just on the GreenBoost product. Right now, David is tracking profitability using the following format: Revenues - GreenBoost ($6 x 350,000 kg) Revenues - OrganicHarvest ($12 x 50,000 kg) Revenues - BioGrow ($10 x 75,000) Total revenues Total costs (joint and separable) Profit $2,100,000 600,000 750,000 3,450,000 (1,360,000) $2,090,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Products
Volume at
split-off (in
kilograms)
Separable
processing
costs
Volume after
additional
Revenue
per
processing (in
kilogram
kilograms)
GreenBoost
350,000
$6
OrganicHarvest¹
100,000
BioGrow²
50,000
$240,000
50,000
$100,000
75,000
$12
$10
David is unsure whether he should continue to produce the three products, or whether it
would be more beneficial to focus just on the GreenBoost product. Right now, David is
tracking profitability using the following format:
Revenues - GreenBoost ($6 x 350,000 kg)
Revenues - OrganicHarvest ($12 x 50,000 kg)
Revenues - BioGrow ($10 x 75,000)
Total revenues
Total costs (joint and separable)
Profit
$2,100,000
600,000
750,000
3,450,000
(1,360,000)
$2,090,000
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