Bermuda Triangle Corporation Has a Joint Process Which Produces Three

question 104

Multiple Choice

Bermuda Triangle Corporation has a joint process which produces three products: X, Y, and Z. Each product may be sold at split- off or processed further and then sold. Joint processing costs for a year amount to $100,000. Other relevant data are as follows: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\& \text { Sales V alue at } & \text { Costs after } & \text { Sales Value at } \\\text { Product } & \text { Split- off } & \underline{\text { Split-off }} & \text { Completion }\\\mathrm{X} & \$ 128,000 & \$ 16,000 & \$ 160,000 \\\mathrm{Y} & 50,000 & 26,000 & 76,000 \\\mathrm{Z} & 25,600 & 20,000 & 40,000\end{array}$ To maximize profits, Bermuda Triangle Corporation should process further.

• A) product Z only
• B) product Y only
• C) product X only
• D) products X, Y, and Z