Answer:
Incremental income from further processing $534,900
The company should process further
Explanation:
<em>A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost. </em>
<em>Also note that all cost incurred up to the split-off point are irrelevant to the decision to process further . </em>
$
Revenue after split-off point
(104×5400) + (53× 11,100) 1,149,900
Revenue at the slit of point
(25,000× $15) <u> (375,000
)</u>
Additional income from further processing 774,900
Further processing cost <u> (240,000)</u>
Incremental income from further processing <u> 534,900</u>
Incremental income from further processing $534,900
The company should process further
