Mayfair Corporation Has a Joint Process That Produces Three Products

question 85

Multiple Choice

Mayfair 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 $15,000.Other data follows:
$\begin{array}{llll}&\text { Sales Value }&\text {Separable Processing }&\text {Sales Value }\\ \text {Product }&\text {at Split-Off}&\text {Costs after Split-Off }&\text { at Completion}\\\mathrm{P} & \$ 62,000 & \$ 5,000 & \$ 88,000 \\\mathrm{G} & 12,500 & 6,500 & 19,500 \\\mathrm{~A} & 9,400 & 5,000 & 12,000\end{array}$
Processing Product G beyond the split-off point will cause profits to ________.

• A) be unchanged
• B) increase by $500
• C) increase by $1,000
• D) increase by $7,000

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