The Meadows Company manufactures a number of products from the same raw material. Joint processing costs total $10,000 per month. Product Z could be sold at the cut-off point for $18,000 per month or it can be further processed at a cost of $9,000 per month and then sold for $26,000. Meadows Company should:
Further process product Z because its incremental revenues will exceed incremental costs by $7,000Further process product Z because its incremental revenues will exceed incremental costs by $17,000.Sell product Z at the split-off point because its incremental costs will exceed incremental revenues by $1,000.
Sell product Z at the split-off point because its incremental costs will exceed incremental revenues by $7,000?