Problem
Wright Company produces products I, J, and K from a single raw material input. Budgeted data for the next month follows:
|
|
Product I
|
Product J
|
Product K
|
|
Units produced
|
2,200
|
2,700
|
3,700
|
|
Per unit sales value at split-off
|
$17
|
$23
|
$22
|
|
Added processing costs per unit
|
$1
|
$3
|
$3
|
|
Per unit sales value if processed further
|
$25
|
$25
|
$30
|
If the cost of the raw material input is $85,000, which of the products should be processed beyond the split-off point?
|
Product I
|
Product J
|
Product K
|
|
A)
|
yes
|
yes
|
no
|
|
B)
|
yes
|
no
|
yes
|
|
C)
|
no
|
yes
|
no
|
|
D)
|
no
|
yes
|
yes
|