California Chemical Co.produces several chemical compounds.Each compound can be sold at the split-off point or processed further.The following results apply to May: $\begin{array}{lccc}
\text { Compound } & \text { Sales Value at } & \text { Costs of Additional } & \text { Sales Value After }\
&\text { Split-off Point}&\text { Processing}&\text { Additional Processing}\
\text { Chem I } & \$ 59,600 & \$ 7,300 & \$ 74,400 \
\text { Chem II } & 70,700 & 17,500 & 82,600 \
\text { Chem III } & 46,700 & 6,200 & 55,500
\end{array}$ After determining which products should be sold at the split-off point and which should be processed further,the total revenue provided by these three products would be

Question

Quizplus · Accepted Answer

From the table, we can see that product A should be sold at the split-off point as the revenue after processing is lower than the revenue at split-off point.
Product B should be processed further as the additional revenue after processing is higher than the revenue at split-off point.
Product C should be sold at the split-off point as the revenue after processing is equal to the revenue at split-off point.
Therefore, the total revenue provided by these three products would be:
Revenue from A at split-off point = $30,000.
Revenue from B after processing = $152,000.
Revenue from C at split-off point = $18,600.
Total revenue = $30,000 + $152,000 + $18,600 = $200,600.

California Chemical Co After Determining Which Products Should Be Sold at the Split-Off