Mann Corporation Has a Joint Process, Which Produces Three Products

question 104

Multiple Choice

Mann Corporation has a joint process, which produces three products, A, B and C. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $125,000. Other relevant data are as follows:

-In processing Product C further,

• A) profits will decrease by $7,000.
• B) incremental profits will exceed incremental costs.
• C) profits will increase by $25,000.
• D) the additional revenue produced will exceed the additional costs.