Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:

-In processing Product B further,
A) profits will decrease by $28,000.
B) incremental profits will exceed incremental costs.
C) profits will increase by $100,000.
D) the additional revenue produced will exceed the additional costs.

Question

Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:
 
-In processing Product B further,
A) profits will decrease by $28,000. 
B) incremental profits will exceed incremental costs. 
C) profits will increase by $100,000. 
D) the additional revenue produced will exceed the additional costs.

Quizplus · Accepted Answer

The Answer of Avey Corporation has a joint process which produces three products, M, L and B. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $500,000. Other relevant data are as follows:
 
-In processing Product B further,
A) profits will decrease by $28,000. 
B) incremental profits will exceed incremental costs. 
C) profits will increase by $100,000. 
D) the additional revenue produced will exceed the additional costs.

Avey Corporation Has a Joint Process Which Produces Three Products