Cellestial Manufacturing Company Produces Products A1, B2, C3, and D4

question 75

Multiple Choice

Cellestial Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000. $\begin{array}{rrrrr}&&&\text { If Frocessed Further }\\&&\text { Sales Value} & \text { Additional }\\\text { Product } & \text { Units Produced } & \text {at Split-Off } &\text { Costs } & \text { Sales Value }\\A 1 & 3,000 & \$ 10,000 & \$ 2,500 & \$ 15,000 \\\text { B2 } & 5,000 & 30,000 & 3,000 & 35,000 \\\mathrm{C3} & 4,000 & 20,000 & 4,000 & 25,000 \\\mathrm{D} 4 & 6,000 & 40,000 & 6,000 & 45,000\end{array}$ If Product B2 is processed further, profits will

• A)increase by $2,000.
• B)decrease by $3,000.
• C)increase by $32,000.
• D)increase by $30,000.

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Definitions:

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and other liquid assets.

Employment Act of 1946

A landmark US legislation aimed at promoting maximum employment, production, and purchasing power, marking a commitment by the federal government to ensure economic stability.

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way possible.

Equilibrium Price Level

This is the price point at which the demand for goods matches the supply, stabilizing the economic market without excess surplus or shortage.