Walters Company produces 15,000 pounds of Product A and 30,000 pounds of Product B each week by incurring a joint production cost of $400,000. Product B can be sold as is or processed further. Further processing does not delay the production of subsequent batches of the joint product. Data regarding these two products are as follows:
___________________________________________Prod A _______________________Prod B
Selling price per pound without further processing...$12.00.......................................$9.00
Selling price per pound with further processing ...................................................$11.00
Total separate weekly variable costs
of further processing..................................................................................$45,000.
Should Walters sell Product B as-is or process it further?
What is the change to income of Walters decided to process further?