Fine Pottery Processors manufactures two products,platters and tureens,from a joint process.Platters are allocated $5,000 of the total joint costs of $25,000.There are 1,500 platters produced and 1,500 tureens produced each year.Platters can be sold at the split-off point for $12 per unit,or they can be processed further into a deluxe platter for additional processing costs of $5,000 and sold for $16 for each deluxe platter.If the platters are processed further and made into deluxe platters,the effect on operating income would be:
A) $1,000 net increase in operating income.
B) $1,000 net decrease in operating income.
C) $18,000 net increase in operating income.
D) $18,000 net decrease in operating income.
Correct Answer:
Verified
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