Wright Company Produces Products I, J, and K from a Single

question 52

Multiple Choice

Wright Company produces products I, J, and K from a single raw material input. Budgeted data for the next month follows: $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Product }$
$\begin{array}{ll}&I&J&K\\\text {Units produced. }&1,500&2,000&3,000\\\text {Per unit sales value at split-off. }&£10&£12&£15\\\text { Added processing costs per unit.}&£2&£4&£4\\\text { Per unit sales value if processed further.}&£15&£15&£20\\\end{array}$
If the cost of the raw material input is £78,000, which of the products should be processed beyond the split-off point?
$\quad$ $\quad$ $\quad$$\text { Product }$
$\begin{array}{lrr}&&\\ &\text {I}&&&\text {J}&&\text {K}\end{array}$

A. $\begin{array}{lrr} \text { yes } & \text { yes }& \text {no } \\\end{array}$
B. $\begin{array}{lrr} \text { yes } & \text {no } & \text { yes }\\\end{array}$
C. $\begin{array}{lrr} \text {no } & \text { yes }& \text {no } \\\end{array}$
D. $\begin{array}{lrr} \text {no } & \text { yes }& \text { yes }\\\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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