afayette Company manufactures two products out of a joint process: Compod and Ultrasene. The joint costs incurred are $930,000 for a standard production run that generates 138,000 gallons of Compod and 98,000 gallons of Ultrasene. Compod sells for $15.00 per gallon while Ultrasene sells for $14.25 per gallon.

Problem 17-32 Part 6

6. Assume the same data as given in parts 3 and 4. The industrial chemical industry has experienced a downturn, which has left Lafayette with idle capacity. Suppose Lafayette can sell only half of the Compod made in each production run, but the remainder could be sold as Compodalene. a. Should Lafayette process the remaining Compod into Compodalene? b. Calculate the contribution per unit that Compodalene makes towards covering the joint production cost, fixed costs, and profit.