Woods Corporation Has a Joint Process That Produces Three Products

question 35

Multiple Choice

Woods 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: $\begin{array}{llll}&&\text { Separable }\\&&\text { Processing }\\\text { Product } & \begin{array}{l}\text { Sales Value at } \\\text { Split-off }\end{array} & \begin{array}{l}\text { Costs after } \\\text { Split-off }\end{array} & \begin{array}{l}\text { Sales Value at } \\\text { Completion }\end{array}\\\mathrm{P} & \$ 32,000 & \$ 5,000 & \$ 88,000 \\\mathrm{G} & 12,500 & 6,500 & 19,000 \\\mathrm{~A} & 9,400 & 5,000 & 12,000\end{array}$ Product G:

• A) should be processed further to increase profits by $6,500
• B) can be processed further or sold at split- off; there is no difference in profit.
• C) should be sold at split- off since processing further would only reduce profits by $6,500
• D) should be processed further to increase profits by $19,000