Bars Manufacturing Company produces Products A1,B2,C3,and D4 through a joint process.The joint costs amount to $200,000. Suppose Product B2 is processed further.What will be the effect on profits?
$\begin{array}{lrrrr}&&&\text { If Processed Further }\&\text { Units}&\text { Sales Value }&\text { Additional }&\text {Sales }\
\text { Product } & \text { Produced } & \text { at Split-Off } & \text { Costs } & \text { Value } \
\text { A1 } & 3,000 & \$ 10,000 & \$ 2,500 & \$ 15,000 \
\text { B2 } & 5,000 & 30,000 & 3,000 & 35,000 \
\text { C3 } & 4,000 & 20,000 & 4,000 & 25,000 \
\text { D4 } & 6,000 & 40,000 & 6,000 & 45,000
\end{array}$
A)Profits will decrease by $3,000.
B)Profits will increase by $2,000.
C)Profits will increase by $30,000.
D)Profits will increase by $32,000.

Question

Quizplus · Accepted Answer

Processing Product B2 further increases its sales value from $30,000 to $35,000, a $5,000 increase, for an additional cost of $3,000, resulting in a net profit increase of $2,000.

Bars Manufacturing Company Produces Products A1,B2,C3,and D4 Through a Joint