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    Joint costs

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    The Freshfield Company manufactures a number of products from the same raw material. Joint processing costs total $10,000 per month. Product A could be sold at the cut-off point for $18,000 per month or it can be further processed at a cost of $9,000 per month and then sold for $31,000. Freshfields Company should:

    - further process product A because its incremental revenues will exceed incremental costs by $4,000

    - further process product A because its incremental revenues will exceed incremental costs by $14,000

    - sell product A at the split-off point because its incremental costs will exceed incremental revenues by $1,000

    - sell product A at the split-off point because its incremental costs will exceed incremental revenues by $4,000

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    https://brainmass.com/business/accounting/accounting-freshfield-company-example-262030

    Solution Summary

    The solution explains the correct alternative in relation to further processing and joint costs.

    $2.19

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