Hamilton, Inc. produces three products using a joint process which provides for $350,000 in joint costs. The products X, Y and Z can be sold at split-off or processed further and then sold. The production level for each product is 5,000 units. The following unit information is also available:

-Once X is produced, processing it further will cause profits to
A) increase by $120,000.
B) stay the same.
C) decrease by $120,000.
D) increase by $24 per unit.

Question

Hamilton, Inc. produces three products using a joint process which provides for $350,000 in joint costs. The products X, Y and Z can be sold at split-off or processed further and then sold. The production level for each product is 5,000 units. The following unit information is also available:
 
-Once X is produced, processing it further will cause profits to
A) increase by $120,000. 
B) stay the same. 
C) decrease by $120,000. 
D) increase by $24 per unit.

Quizplus · Accepted Answer

The Answer of Hamilton, Inc. produces three products using a joint process which provides for $350,000 in joint costs. The products X, Y and Z can be sold at split-off or processed further and then sold. The production level for each product is 5,000 units. The following unit information is also available:
 
-Once X is produced, processing it further will cause profits to
A) increase by $120,000. 
B) stay the same. 
C) decrease by $120,000. 
D) increase by $24 per unit.