DesPlaines Corporation Has a Joint Process That Produces Three Products

question 2

Multiple Choice

DesPlaines 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:
$\begin{array}{llll}&\text { Sales Value }&\text {Separable Processing }&\text {Sales Value }\\ \text {Product }&\text {at Split-Off}&\text {Costs after Split-Off }&\text { at Completion}\\P & \$ 12 & \$ 8 & \$ 20 \\G & 10 & 4 & 17 \\A & 15 & 6 & 19\end{array}$
If Product P is processed beyond the split-off point,profits will ________.

• A) increase by $90,000
• B) increase by $120,000
• C) increase by $210,000
• D) remain the same

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Definitions:

Capacity Management

The practice of planning and controlling the resources of an organization or system to ensure optimal performance.

Product Flexibility

The ability of a company to modify its products to meet customer preferences or market demands.

Workforce Schedule

The planning of working hours and assignments for employees to ensure operational efficiency.

Available Capacity

The maximum amount of work that an organization is capable of completing in a given period without exceeding its resources.