Tomate, inc., a tomato ketchup manufacturing company, was producing at 75 percent of its production capacity, which was 500,000 bottles a year. a retail giant from a different region offered to buy 150,000 bottles of ketchup at $2 per bottle. the normal selling price is $2.25 bottle. based on the given scenario, which of the following tactical decision alternatives should tomate, inc., consider?
a. sell-or-process further
b. keep-or-drop
c. make-or-buy
d. accept-or-reject special order

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer