`Homework Answers
Solution:
The analysis can be done as follows:
| Sell now | Process further | |
|---|---|---|
| Revenue (units×selling price per kg ) | $11,000 | $15,400 |
| Further Cost | 0 | 2,200 |
| Income | $11,000 | $13,200 |
It can be seen that, on processing the further, company would be better off by = 13,200-11,000 = $2,200.
Thus, option a. is the correct choice.
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Sales
Value
at Split-Off
Point
Cost
to
Process
Further
Sales
Value
after Further
Processing
Product 10
$59,100
$100,200
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16,000
30,500
35,000
Product 14
54,000
149,800
215,300...
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