Doctor Apple is an apple orchard that also produces a variety of apple products. One of their processes yields two different outputs: apple sauce and apple pie filling. One production run produces 300 pounds of apple sauce, and 100 pounds of apple pie filling. Doctor Apple can process the apple sauce and apple pie filling further, or can sell the products to other companies.
The process to produce one batch (before the split-off point) requires $100 of direct materials, $300 of direct labor, and $50 of variable overhead, with an allocation of $40 of fixed overhead, which is included in calculation of gross profit. At the split-off point, apple sauce sells for $1.50/pound, and apple pie filling sells for $4/pound. Further processing of one batch requires the following:
Which product(s) should be processed further? If the optimal choices regarding each product are made, what is the Gross Profit realized on one batch?

Question

Doctor Apple is an apple orchard that also produces a variety of apple products. One of their processes yields two different outputs: apple sauce and apple pie filling. One production run produces 300 pounds of apple sauce, and 100 pounds of apple pie filling. Doctor Apple can process the apple sauce and apple pie filling further, or can sell the products to other companies. 
The process to produce one batch (before the split-off point) requires $100 of direct materials, $300 of direct labor, and $50 of variable overhead, with an allocation of $40 of fixed overhead, which is included in calculation of gross profit. At the split-off point, apple sauce sells for $1.50/pound, and apple pie filling sells for $4/pound. Further processing of one batch requires the following:
  Which product(s) should be processed further? If the optimal choices regarding each product are made, what is the Gross Profit realized on one batch?

Quizplus · Accepted Answer

The Answer of Doctor Apple is an apple orchard that also produces a variety of apple products. One of their processes yields two different outputs: apple sauce and apple pie filling. One production run produces 300 pounds of apple sauce, and 100 pounds of apple pie filling. Doctor Apple can process the apple sauce and apple pie filling further, or can sell the products to other companies. 
The process to produce one batch (before the split-off point) requires $100 of direct materials, $300 of direct labor, and $50 of variable overhead, with an allocation of $40 of fixed overhead, which is included in calculation of gross profit. At the split-off point, apple sauce sells for $1.50/pound, and apple pie filling sells for $4/pound. Further processing of one batch requires the following:
  Which product(s) should be processed further? If the optimal choices regarding each product are made, what is the Gross Profit realized on one batch?

Doctor Apple Is an Apple Orchard That Also Produces a Variety