Cena Corporation Has a Joint Process That Produces Three Products

question 25

Multiple Choice

Cena Corporation has a joint process that produces three products: P, G, and A.Each product may be sold at split-off or processed further and then sold.Joint-processing costs for a year amount to $25,000.Other relevant data are as follows: $\begin{array}{rlc} && \text { Separable } & \\&& \text { Processing } & \\&\text { Sales Value } & \text { Costs after } & \text { Sales Value } \\\text { Product } & \text {at Split-off } & \text { Split-off } & \text { at Completion }\\\text { P } & \$ 32,000 & \$ 5,000 & \$ 40,000 \\\text { G } & 16,500 & 7,500 & 29,000 \\\text { A } & 6,400 & 8,000 & 10,000\end{array}$ Once product P is produced, processing it further will cause profits to _____.

• A)increase by $8,000
• B)decrease by $5,000
• C)decrease by $8,000
• D)increase by $3,000

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Definitions:

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