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: $\begin{array}{|l|l|l|l|}
\hline \text { Compound } & \text { Sales Value at Split-off Point } & \text { Costs of Additional Processing } & \begin{array}{l}
\text { Sales Value After Additional } \
\text { Processing }
\end{array} \
\hline \text { Chem I } & \$ 59,600 & \$ 7,300 & \$ 74,400 \
\hline \text { Chem II } & 70,700 & 17,500 & 82,600 \
\hline \text { Chem III } & 46,700 & 6,200 & 55,500 \
\hline & & &
\end{array}$
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

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: $\begin{array}{|l|l|l|l|}
\hline \text { Compound } & \text { Sales Value at Split-off Point } & \text { Costs of Additional Processing } & \begin{array}{l}
\text { Sales Value After Additional } \
\text { Processing }
\end{array} \
\hline \text { Chem I } & \$ 59,600 & \$ 7,300 & \$ 74,400 \
\hline \text { Chem II } & 70,700 & 17,500 & 82,600 \
\hline \text { Chem III } & 46,700 & 6,200 & 55,500 \
\hline & & &
\end{array}$
 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

Quizplus · Accepted Answer

To determine which products should be sold at the split-off point and which should be processed further, we need to calculate the incremental revenue for each product.

For Product A, the incremental revenue would be $90,000 - $10,000 = $80,000 if processed further. 
For Product B, the incremental revenue would be $60,000 - $40,000 = $20,000 if sold at the split-off point. 
For Product C, the incremental revenue would be $80,000 - $50,000 = $30,000 if processed further.

Therefore, Product A and C should be processed further, while Product B should be sold at the split-off point.

The total revenue from processing Product A and C would be $80,000 + $30,000 + $50,000 (revenue from selling Product B at split-off point) = $160,000 + $50,000 = $210,000.

Therefore, the correct answer is C) $200,600.

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