Omega Company manufactures three chemicals in a joint process. The manufacturing costs of the joint process include $25,000 of direct materials and $35,000 of conversion costs. All three chemicals are then processed further before they are sold. Other pertinent data are as follows:

The decision to process all three chemicals beyond the split-off point is suboptimal. If the optimal decision had been made, the income of Omega Company would have improved by

a. $2,000

b. $10,000

c. $30,000

d. $60,000

e. $12,000

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Final Sales Value Sales Value at Separable Costs Chemicals Split-off $50,000 $28,000 $100,000 40,000 10,000 60,000 40,000 30,000 12,000