Schultz, Inc. produces three separate products from a common process costing $100,000. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period.

Instructions
(a) Determine total net income if all products are sold at the split-off point.
(b) Determine total net income if all products are sold after further processing.
(c) Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.
(d) Determine total net income using the results from (c) and explain why the net income is different from that determined in(b).

Sales Value at Split-off Point Cost to Process Further $100,000 30,000 150,000 Sales Value after Further Processing $190,000 Product 12 Product 14 Product 16 $50,000 10,000 60,000 35,000 220,000