Business, 08.11.2019 06:31 AkramMasoud

Sell at split-off or process further bozo inc. manufactures two products from a joint production process. the joint process costs $110,000 and yields 6,000 pounds of lte compound and 14,000 pounds of hs compound. lte can be sold at split-off for $55 per pound. hs can be sold at split-off for $13 per pound. a buyer of hs asked bozo to process hs further into cs compound. if hs were processed further, it would cost $40,800 to turn 14,000 pounds of hs into 4,000 pounds of cs. the cs would sell for $59 per pound.

required:

1. what is the contribution to income from selling the 14,000 pounds of hs at split-off? $
2. conceptual connection: what is the contribution to income from processing the 14,000 pounds of hs into 4,000 pounds of cs? $ should bozo continue to sell the hs at split-off or process it further into cs?

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