Lido Products Produces Two Products (A and B) from a Joint

question 17

Multiple Choice

Lido Products produces two products (A and B) from a joint process. The joint cost of production is $80 000. Five thousand units of Product A can be sold at split-off for $20 per unit or processed further at an additional cost of $20 000 and sold for $25 per unit. Ten thousand units of Product B can be sold at split-off for $15 per unit or processed further at an additional cost of $20 000 and sold for $16 per unit.
What is the difference in profit if Lido decides to process further Product B, instead of selling it at split-off?

• A) $10 000 increase
• B) $20 000 increase
• C) $10 000 decrease
• D) $58 000 decrease

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Definitions:

HI

Hydroiodic acid, a diatomic molecule consisting of one hydrogen atom and one iodine atom, known for being a strong acid.

K

The chemical symbol for Potassium, a soft, silvery-white metallic element that is highly reactive with water.

pH

A scale used to specify the acidity or basicity of an aqueous solution, with values ranging from 0 (very acidic) to 14 (very basic).

HA

Often used as an abbreviation for Hyaluronic Acid, a substance found in the human body known for its benefits in skincare and joint health.