Your Company makes two products, Wick and Pen, in a joint process. At the split-off point, 90,000 units of Wick and 40,000 units of Pen are available each month. Monthly joint production costs are allocated as follows: Wick $25 per unit; Pen $10 per unit. Wick can be sold at the split-off point for $26.60 per unit and Pen can be sold for $24.00 per unit. Wick can be processed further for $4.75 and sold for $30.70 per unit. Pen can be processed further for $6.75 and sold for $32.70 per unit. If Wick is processed further and then sold, rather than being sold at the split-off point, what is the change in monthly net income? a) $58,500 b) $78,000 c) ($78,000) d) ($58,500)
Your Company makes two products, Wick and Pen, in a joint process. At the split-off point, 90,000 units of Wick and 40,000 units of Pen are available each month. Monthly joint production costs are allocated as follows: Wick $25 per unit; Pen $10 per unit. Wick can be sold at the split-off point for $26.60 per unit and Pen can be sold for $24.00 per unit. Wick can be processed further for $4.75 and sold for $30.70 per unit. Pen can be processed further for $6.75 and sold for $32.70 per unit. If Wick is processed further and then sold, rather than being sold at the split-off point, what is the change in monthly net income?
a) $58,500
b) $78,000
c) ($78,000)
d) ($58,500)
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