Digger Company Realizes Three Products from a Single Mining Process $\quad$

question 21

Essay

Digger Company realizes three products from a single mining process: Products J1, A2, and V3.Each product may be sold as is in its raw form or processed further into a more refined state.The additional processing requires no expanded capacity and production costs are entirely variable.Sales values and cost information are presented below:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { If Processed Further }$
$\begin{array}{rrrrrr}&&&&\text { Additional }\\\text { Product}&\text { Units Produced}&\text { Sales Value As Is }&\text {Sales Value }&\text { Costs }\\\mathrm{J} 1 & 14,000& \$ 60,000 & \$ 100,000 & \$ 22,000 \\\mathrm{~A} 2 & 10,000& 100,000& 108,000& 16,000 \\\mathrm{V} 3 & 6,000 & 58,000 & 78,000 & 20,000\end{array}$
(a.)Determine whether Digger Company should sell each product as is or after further processing.

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