Lisle Corporation Has a Joint Process That Produces Three Products

question 139

Multiple Choice

Lisle 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.The production level for each product is 10,000 units.Other data follows:
$\begin{array}{llll}&\text { Sales Value }&\text {Separable Processing }&\text {Sales Value }\\ \text {Product }&\text {at Split-Off}&\text {Costs after Split-Off }&\text { at Completion}\\P&\$ 12 & \$ 9 & \$ 21 \\G&10 & 3 & 17 \\A&15 & 6 & 19\end{array}$
Product G ________.

• A) should be sold at split-off point to maximize profits
• B) should be processed further to increase profits by $30,000
• C) should be processed further to increase profits by $40,000
• D) should be processed further to increase profits by $70,000

---

Definitions:

Public Utilities

Organizations that provide essential services to the public such as water, electricity, natural gas, and telecommunications.

Target Return-on-sales Pricing

A pricing strategy where the price is set with the aim of achieving a specific return on sales percentage.

Profit Percentage

A financial metric that shows what percentage of sales has turned into profits, indicating the efficiency of a company's operations.

Sales Volume

The total quantity of goods or services sold by a company within a specific period.