Chicago Corporation Has a Joint Process That Produces Three Products

question 61

Multiple Choice

Chicago 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:
$\begin{array}{llll}&\text { Sales Value }&\text {Separable Processing }&\text {Sales Value }\\ \text {Product }&\text {at Split-Off}&\text {Costs after Split-Off }&\text { at Completion}\\X & \$ 128,000 & \$ 16,000 & \$ 152,000 \\Y & 50,000 & 26,000 & 76,000 \\Z & 25,600 & 20,000 & 40,000\end{array}$
Processing Product X beyond the split-off point will cause profits to ________.

• A) be unchanged
• B) increase by $8,000
• C) increase by $24,000
• D) decrease by $24,000

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