Brookfield Corporation Has a Joint Process That Produces Three Products

question 115

Multiple Choice

Brookfield Corporation has a joint process that 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 data follows:
$\begin{array}{llll}&\text { Sales Value }&\text {Separable Processing }&\text {Sales Value }\\ \text {Product }&\text {at Split-Off}&\text {Costs after Split-Off }&\text { at Completion}\\X & \$ 128,000 & \$ 16,000 & \$ 150,000 \\Y & 75,000 & 26,000 & 99,000 \\Z & 32,600 & 20,000 & 50,000\end{array}$
Processing Product X beyond the split-off point will cause profits to ________.

• A) be unchanged
• B) increase by $6,000
• C) increase by $16,000
• D) increase by $22,000

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