A Company Puts Four Products Through a Common Production Process

question 124

Essay

A company puts four products through a common production process.This process costs $100,000 each year.The four products can be sold when they emerge from this process at the "split-off point",or processed further and then sold.Data about the four products for the coming period are:
$\begin{array}{lrrrr}&&\text { Unit Sales } & \text { Unit Sales } & \\&&\text { Price per } & \text { Price per } & \\&&\text { Pound } & \text { Pound } & \text { Additional } \\&&\text { at Split-Off } & \text { after Further } & \text { Processing }\\ \text { Product}&\text { Volume }&\text {Point}&\text { Processing }&\text {Costs }\\\text { Singer } & 20,000 \mathrm{lb} . & \$ 28.00 & \$ 42.00 & \$ 400,000 \\\text { Talker } & 10,000 \mathrm{lb} . & 7.00 & 28.00 & 144,000 \\\text { Walker } & 5,000 \mathrm{lb} . & 36.00 & 58.00 & 120,000 \\\text { Sayer } & 5,000 \mathrm{lb} . & 18.00 & 22.00 & 40,000\end{array}$
Determine which products should be sold at the split-off point and which should be processed further.

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Definitions:

Evolutionary Social Psychology

An extension of evolutionary psychology that views complex social behaviour as adaptive, helping the individual, kin and the species as a whole to survive.

Social Behaviour

Actions and interactions among individuals within a society, influenced by social norms, culture, and individual characteristics.

Giver

An individual who provides or transfers something to another without expecting anything in return, often enhancing social bonds or contributing to communal welfare.

Altruistic Behaviour

Actions taken to benefit others without expecting any benefit or reward in return.