r Process Further, Basic Analysis Carleigh, Inc., is a pork processor. Its plants, located in the Midwest, produce several products from a common process: sirloin roasts, chops, spare ribs, and the residual. The roasts, chops, and spare ribs are packaged, branded, and sold to supermarkets. The residual consists of organ meats and leftover pieces that are sold to sausage and hot dog processors. The joint costs for a typical week are as follows: Direct materials $85,500 Direct labor 34,600 Overhead 26,500
Sell or Process Further, Basic Analysis
Carleigh, Inc., is a pork processor. Its plants, located in the Midwest, produce several products from a common process: sirloin roasts, chops, spare ribs, and the residual. The roasts, chops, and spare ribs are packaged, branded, and sold to supermarkets. The residual consists of organ meats and leftover pieces that are sold to sausage and hot dog processors. The joint costs for a typical week are as follows:
| Direct materials | $85,500 |
| Direct labor | 34,600 |
| 26,500 |
The revenues from each product are as follows: sirloin roasts, $78,000; chops, $75,000; spare ribs, $34,500; and residual, $8,200.
Carleigh’s management has learned that certain organ meats are a prized delicacy in Asia. They are considering separating those from the residual and selling them abroad for $50,600. This would bring the value of the residual down to $3,200. In addition, the organ meats would need to be packaged and then air freighted to Asia. Further
![**Required:**
1. What is the gross profit earned by the original mix of products for one week?
$_____
2. Should the company separate the organ meats for shipment overseas or continue to sell them at split-off?
[Separate the organ meats for shipment overseas] ✅
What is the effect of the decision on weekly gross profit?
[Increase] ✅ by $_____
**Explanation:**
This exercise involves evaluating the profitability of business decisions related to product mix and sales strategy. It requires calculating gross profit, deciding on shipping strategies for organ meats, and assessing the financial impact of these strategies on weekly gross profit.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffb9455e9-1b75-42ab-87bf-b8a6d9f2482d%2F5db54546-380f-458d-97cd-020fb05df382%2Fx4ls91h_processed.png&w=3840&q=75)
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