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Undertaker Corporation has a joint process that produces three products: P, G, a

ID: 2447765 • Letter: U

Question

Undertaker Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $25,000. Other relevant data are as follows:

                                                                                                                

                                                                      Processing

                           &nbs

Cena Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint-processing costs for a year amount to $25,000. Other relevant data are as follows:                                                                                 Processing                                                 Sales Value     Costs after      Sales Value                         Product          at Split-off      Split-off          at Completion                         P                      $32,000           $5,000            $40,000                         G                     16,500            7,500                29,000                          A                        6,400            8,000         10,000 Once product P is produced, processing it further will cause profits to _____. A. increase by $8,000 B. decrease by $5,000 C. increase by $3,000 D. decrease by $8,000

Explanation / Answer

Undertaker Corporation has a joint process that producesthree products: P, G, and A. Each product may besold at split-off or processed further and then sold. Jointprocessing costs for a year amount to $25,000.Other relevant data are as follows:

                                                                                                             

                                                                   Processing

                                          SalesValue       Costsafter              Sales Value

                             Product atSplit-off         Split-off              at Completion

                                G        12,500                    6,500                      19,000

                                A          9,400                     5,000                      12,000

Product G _____.

Cena Corporation has a joint process that producesthree products: P, G, and A. Each product may be sold atsplit-off or processed further and then sold. Joint-processingcosts for a year amount to $25,000. Other relevant data are asfollows:                                                                              Processing                                               Sales Value     Costsafter      Sales Value                        Product         at Split-off     Split-off         at Completion                        P                     $32,000          $5,000           $40,000                        G                    16,500           7,500               29,000                        A                       6,400           8,000        10,000 Once product P is produced, processing it further willcause profits to _____.