Two Products, LB and NH, Emerge from a Joint Process

question 137

Multiple Choice

Two products, LB and NH, emerge from a joint process. Product LB has been allocated $30,800 of the total joint costs of $44,000. A total of 2,000 units of product LB are produced from the joint process. Product LB can be sold at the split-off point for $13 per unit, or it can be processed further for an additional total cost of $14,000 and then sold for $15 per unit. If product LB is processed further and sold, what would be the effect on the overall profit of the company compared with sale in its unprocessed form directly after the split-off point?

• A)$16,000 more profit
• B)$20,800 more profit
• C)$40,800 less profit
• D)$10,000 less profit

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Definitions:

Approach-approach Conflict

A psychological conflict that occurs when a person has to choose between two attractive goals or outcomes.

Double approach-avoidance Conflict

A psychological conflict that occurs when a person faces a choice between two options, each having both appealing and negative aspects.

Uplifts

Positive experiences or occurrences that can improve one's mood and counterbalance stress, enhancing overall well-being.

Hassles

Minor everyday annoyances or problems that, cumulatively, can contribute to stress and affect well-being.