Payne Company makes two drugs,Moxi and Nedadil, in a joint process. Al the spit

Question

Payne Company makes two drugs,Moxi and Nedadil, in a joint process. Al the spit off point, 20000 units of Moxd and 30000 units of Nedacil are available each month. Monthly joint production costs are $50000 Payne allocates the joint costs based on number of units produced. Moxd can be sold at the split-off point for $6.10 per unit. Nedacil can elther be sold at the $7.10 per unit or t can be processed further into Nedafenatol and sold for $10.30 per unit. To make the Nedafenatol, additional processing costs of $2.95 per unit wll be incurred point for Nedadi s processed futher (inio Nedatenatol) then sold, rather than being sold as Nadadi, by how much would monthy operating income change? Give me the amount with a egative sign i income would decrease. Input just the amount if income would increase. Input O if Income would not nearest penny, when needed.) I change. (Round any per unit amounts in intermediary computations and fnnal answers to the What would the selling price per unit of Nedafenatsi need nearest penny) to be in order for Payne Company to be economically indifferent between selling Nedail or NedafenatolyRound your answer to the

Explanation / Answer

Incremental profit from further processing: Incremental revenue from further processing 96000 (10.30-7.10)30,000 units Less: Incremental Cost (30,000 units @2.95) 88500 Incremental income generated 7500 Incremental income generated from further processing: 7500 Selling price of Nedafenatol shall be(for indifference) Selling price at split off point 7.1 Add: Further processing cost 2.95 For indifference point, Selling price would be 10.05

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