Question: Booths Industry produces two products from a common input. Data relating to the two products are given below: Product A Product B Sales value at

Booths Industry produces two products from a common input. Data relating to the two products are given below:

	Product A	Product B
Sales value at split-off point...	$100,000	$120,000
Allocated joint product costs.	$45,000	90,000
Sales value after further processing...	$120,000	200,000
Cost of further processing.	$20,000	85,000

At present practice Booths Industry sold each joint product after further processing. If the joint product will be sold at split-off point, how much would be the difference in the companys overall profit?

Select one:

a. $110,000 difference less than at present practice.

b. $5,000 difference less than at present practice.

c. $10,000 difference less than at present practice.

d. $5,000 difference higher than at present practice.

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