Question: (Processing beyond split-off) Mabika Cannery makes three apple products from a single joint process. For 2006, the cannery processed all three prod ucts beyond split-off.

(Processing beyond split-off) Mabika Cannery makes three apple products from a single joint process. For 2006, the cannery processed all three prod¬ ucts beyond split-off. The following data were generated for the year:

Joint Product Candied apples Apple jelly Apple jam Incremental Separate Cost $26,000

Analysis of 2006 market data reveals that candied apples, apple jelly, and apple jam could have been sold at split-off for $642,000, $706,000, and $253,000, respectively.

a. Based on hindsight, evaluate management’s production decisions in 2006.

b. How much additional profit could the company have generated in 2006 if it had made optimal decisions at split off? LO1.

Joint Product Candied apples Apple jelly Apple jam Incremental Separate Cost $26,000 38,000 15,000 Total Revenue $620,000 740,000 270,000

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