Question

Atlanta Manufacturing Company produces products A, B, C, and D through a joint process. The joint costs amount to $100,000. Product Units Produced Sales Value at Split-Off Additional Costs of Processing Sales Value After Processing A 1,500 $10,000 $2,500 $15,000 B 2,500 $30,000 $3,000 $35,000 C 2,000 $20,000 $4,000 $25,000 D 3,000 $40,000 $6,000 $45,000 If A is processed further, profits of A will:

Answer 1

Answer:

increase by $2,500

Explanation:

Calculation to determine what the profit of A will be if A is processed further

Profit A if processed further=$15,000-$10,000-$2,500

Profit A if processed further=$2,500

Note that The $2,500 is cost of additional processing

Therefore If A is processed further, profits of A will:increase by $2,500