Georgia Manufacturing Company produces products A, B, C, and D through a joint p

Question

Georgia Manufacturing Company produces products A, B, C, and D through a joint process. The joint costs amount to $250,000. Product Units Produced Sales Value at Split-Off Additional Costs of Processing Sales Value After Processing A 1,500 $20,000 $5,000 $30,000 B 2,500 $60,000 $6,000 $70,000 C 2,000 $40,000 $8,000 $50,000 D 3,000 $80,000 $12,000 $90,000 If A is processed further, profits of A will Select one: A. decrease by $45,000. B. increase by $10,000. C. increase by $25,000. D. increase by $5,000.

Explanation / Answer

Answer: D. increase by $5,000.

Because:

=$30000-$20000-$5000=$5000

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