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Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
Edition 17ISBN: 978-0078025778 Exercise 19
Selling at Split-off or Processing Further
A variety of products-chicken wings, drumsticks, thighs, and so on-are the result of a joint production process of butchering a chicken that costs $0.25 per pound. The wings can be sold at the split-off point for $0.35 per pound, or they can be processed further by cooking them in barbecue sauce and selling them as buffalo wings for $0.46 per pound. The cooking process can accommodate 1,300 pounds of wings at a time and còsts $90 for sauce, cooking time, and labor. Should the wings be processed further to make buffalo wings?
A variety of products-chicken wings, drumsticks, thighs, and so on-are the result of a joint production process of butchering a chicken that costs $0.25 per pound. The wings can be sold at the split-off point for $0.35 per pound, or they can be processed further by cooking them in barbecue sauce and selling them as buffalo wings for $0.46 per pound. The cooking process can accommodate 1,300 pounds of wings at a time and còsts $90 for sauce, cooking time, and labor. Should the wings be processed further to make buffalo wings?
Explanation
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Incremental revenue analysis:
Note: T...
Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello
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