a. Wool Inc. should <u>process further</u> Red Wool and Blue Wool.
b. Wool Inc. can sell Blue Wool at the split-off point at <u>$24 per unit </u>($120,000/5,000) without further processing, instead of selling at $36 per unit ($180,000/5,000) after further processing.
<h3>What is the split-off point?</h3>
The split-off point is the processing point when joint products can be further processed separately.
At the split-off point, the costs of the joint products can be identified separately.
<h3>Data and Calculations:</h3>
Sales Value and Additional Costs If Processed Further:
Pounds Sales Value Final Sales Further Profit from
Produced at Split-Off Value Processing Further
Cost Processing
Red Wool 10,000 $110,000 $200,000 $50,000 $40,000
Blue Wool 5,000 100,000 180,000 60,000 20,000
Yellow Wool 3,000 90,000 110,000 21,000 -1,000
Thus, the profits from further processing are computed as the Final Sales Value minus Further Processing Cost minus Sales Value at the Split-off point.
Learn more about joint products at brainly.com/question/25408525
