Paulsen Corporation Makes Two Products, W and P, in a Joint

question 135

Multiple Choice

Paulsen Corporation makes two products, W and P, in a joint process. At the split-off point, 50,000 units of W and 60,000 units of P are available each month. Monthly joint production costs are $290,000. Product W can be sold at the split-off point for $5.60 per unit. Product P either can be sold at the split-off point for $4.75 per unit or it can be further processed and sold for $7.20 per unit. If P is processed further, additional processing costs of $3.10 per unit will be incurred.
-If P is processed further and then sold, rather than being sold at the split-off point, the change in monthly net operating income would be a:

• A)$147,000 decrease
• B)$147,000 increase
• C)$39,000 increase
• D)$39,000 decrease

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Definitions:

Musical Giftedness

An exceptional skill or talent in understanding, creating, and performing music.

Genotype

The genetic makeup of an organism, consisting of all the DNA and genes, influencing its development, appearance, and behavior.

Phenotype

The set of observable characteristics or traits of an organism that result from the interaction of its genotype with the environment.

Incomplete Dominance

Pattern of inheritance in which a child receives two different alleles, resulting in partial expression of a trait.