Question: (Processing beyond split-off) Post Food Processors makes three products in a single joint process. For 1997, the firm processed all three products beyond the split-

(Processing beyond split-off) Post Food Processors makes three products in a single joint process. For 1997, the firm processed all three products beyond the split- off point. The following data are generated for the year. JOINT PRODUCT FINAL REVENUES INCREMENTAL SEPARATE COSTS Candied Peaches $72,000 $28,000 Peach

Analysis of 1997 market data reveals that these three products could have been sold at split-off for $50,000, $40,000, and $10,000 respectively.

a. Evaluate, based on hindsight, management’s production decisions in 1997.

b. How much additional profit could the company have generated in 1997 with better ability to forecast prices?LO1

JOINT PRODUCT FINAL REVENUES INCREMENTAL SEPARATE COSTS Candied Peaches $72,000 $28,000 Peach Jelly 64,000 48,000 Peach Jam 27,000 15,000

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