Orange Manufacturing Company Produces Three Products Using a Joint Process

question 113

Multiple Choice

Orange Manufacturing Company produces three products using a joint process which accumulates $25,000 in joint costs. The products, A, B, and C, can be sold at split- off or processed further and then sold. The production level for each product is 10,000 units. The following unit information is also available: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\& \text { Sales V alue at } & \text { Costs after } & \text { Sales Value at } \\\text { Product } & \text { Split- off } & \underline{\text { Split-off }} & \text { Completion }\\\mathrm{A} & \$ 12 & \$ 9 & \$ 21 \\\mathrm{~B} & 10 & 4 & 17 \\\mathrm{C} & 15 & 6 & 19\end{array}$ To maximize profits, Orange Manufacturing Company should process further.

• A) product A only
• B) product B only
• C) product C only
• D) products A, B, and C

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