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# Products A, B, and C are produced from a single raw material input

Products A, B, and C are produced from a single raw material input. The Raw material costs \$90,000 from which 5,000 units of A, 10,000 units from B, and 15,000 units of C can be produced each period. Product A can be sold at the split off point for \$2 per unit, or it can be processed further at a cost of \$12,500 and then sold for \$5 per unit. Product A should Be:

A) Sold at the split off point, since further processing would result in a loss of \$0.50 per unit
B) Processed further, since this will increase profits by \$2500 each period
C) Sold at the split off point, since further processing will result in a loss of \$2500 each period
D) Processed further, since this will increase profits by \$12,500 each period

#### Solution Preview

Products A, B, and C are produced from a single raw material input. The Raw material costs \$90,000 from which 5,000 units of A, 10,000 units from B, and 15,000 units of C can be produced each period. Product A can be sold at the split off ...

#### Solution Summary

The expert examines products A, B and C are produced from a single raw material input.

\$2.19