Brittany Furniture manufactures two products, pillows and cushions, from a joint process. Pillows are allocated $7,000...

 

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Brittany Furniture manufactures two products, pillows and cushions, from a joint process. Pillows are allocated $7,000 of the total joint costs of $25,000. There are 2,500 pillows produced and 2,500 cushions produced each year. Pillows can be sold at the split-off point for $12 per unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,000 and sold for $16 for each deluxe pillow. By how much will operating income change if the company chooses to process deluxe pillows? O A. $32,000 net increase in operating income O B. $30,000 net increase in operating income O C. $3,000 net decrease in operating income D. $2,000 net increase in operating income O E. $23,000 net increase in operating income Brittany Furniture manufactures two products, pillows and cushions, from a joint process. Pillows are allocated $7,000 of the total joint costs of $25,000. There are 2,500 pillows produced and 2,500 cushions produced each year. Pillows can be sold at the split-off point for $12 per unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,000 and sold for $16 for each deluxe pillow. By how much will operating income change if the company chooses to process deluxe pillows? O A. $32,000 net increase in operating income O B. $30,000 net increase in operating income O C. $3,000 net decrease in operating income D. $2,000 net increase in operating income O E. $23,000 net increase in operating income

Answer rating: 100% (QA)

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