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India Corporation Has $200,000 of Joint Processing Costs and Is

question 4

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India Corporation has $200,000 of joint processing costs and is studying whether to process J and K beyond the split-off point. Information about J and K follows.  Product J  Product K  Tons produced 25,00015,000 Scparable variable processing eosts bcyond split-olI $64,000$100.000 Selling price per ton at split-off 1552 Selling price per ton after additional processing 2158\begin{array} { | l | r | r | } \hline & \text { Product J } & \text { Product K } \\\hline \text { Tons produced } & 25,000 & 15,000 \\\hline \text { Scparable variable processing eosts bcyond split-olI } & \$ 64,000 & \$ 100.000 \\\hline \text { Selling price per ton at split-off } & 15 & 52 \\\hline \text { Selling price per ton after additional processing } & 21 & 58 \\\hline\end{array} If India desires to maximize total company income, what should the firm do with regard to Products J and K?  Product J  Product K 1 Sell at split-off  Sell at split-off 2 Sell at split-off  Process beyond split-off 3 Process beyond split-off  Sell at split-off 4 Process beyond split-off  Process beyond split-off 5 There is not enough information to judge. \begin{array} { | l | l | l | } \hline & \text { Product J } & \underline { \text { Product K } } \\\hline 1 & \text { Sell at split-off } & \text { Sell at split-off } \\\hline 2 & \text { Sell at split-off } & \text { Process beyond split-off } \\\hline 3 & \text { Process beyond split-off } & \text { Sell at split-off } \\\hline 4 & \text { Process beyond split-off } & \text { Process beyond split-off } \\\hline 5 & \text { There is not enough information to judge. } \\\hline\end{array}

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Definitions:

Stock Listing

Information regarding a company's shares that are available for trading on an exchange.

Shares Sold

The quantity of individual stocks that have been purchased by investors and are on the market.

Convertible Preferred Stock

A type of preferred stock that holders can convert into a specified number of common stock shares, usually at any time after a predetermined date.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a portion of the profits through dividends.

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