Answer:
in both cases, product light is not profitable, but processing further increases the losses by $7,500 - $2,400 = $5,100
Explanation:
total joint costs $55,000
- light = $34,300
- heavy = $20,700
2,900 units of light are produced, so cost per unit = $34,300 / 2,900 = $11.8276 per unit
if product light is sold at $11 per unit at the split-off point, it will yield a $2,400 loss
if further processed, total costs of product light = $34,300 + $10,900 = $45,200. Cost per unit = $45,200 / 2,900 = $15.5862
if product light is sold at $13 per unit after further processing, it will yield a $7,500 loss
in both cases, product light is not profitable, but processing further increases the losses by $7,500 - $2,400 = $5,100
