Oakes Inc. manufactured 40,000 gallons of Mononate and 60,000 gallons of Beracyl in a joint production process, incurring $250,000 of joint costs. Oakes allocates joint costs based on the physical volume of each product produced. Mononate and Beracyl can each be sold at the split-off point in a semifinished state or, alternatively, processed further. Additional data about the two products are as follows:

An assistant in the company’s cost accounting department was overheard saying “...that when both joint and separable costs are considered, the firm has no business processing either product beyond the split-off point. The extra revenue is simply not worth the effort.” Which of the following strategies should be recommended for Oakes?

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Beracyl Mononate Sales price per gallon at split-off Sales price per gallon if processed further Variable roduction costs if processed further $7 $15 $10 $18 $125,000 $115,000 Mononate Beracyl Sell at split-off a. Sell at split-off b. Sell at split-off c. Process further Sell at split-off Process further d. Process further Process further