Question: (Sell or process further) A certain joint process yields two joint products, A and B. The joint cost for May 1998 is $80,000, and the

(Sell or process further) A certain joint process yields two joint products, A and B. The joint cost for May 1998 is $80,000, and the sales value of the output at split-off is $120,000 for Product A and $100,000 for Product B. Management is trying to decide whether to process the products further. If the products are processed beyond split-off, the final sales value will be $180,000 for Product A and $140,000 for Product B. The additional costs of processing are expected to be $70,000 for A and $34,000 for B.

a. Should management process the products further? Show computations.

b. Were any revenues and/or costs irrelevant to the decision? If so, what were they?

LO1

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