NOTE: Two problems in the Module $12$ Homework Assignment use the same information but ask different questions.

Lilybird Inc. produces two products from a common process. Joint costs are $$100,900.$

Each of the products can be sold at the split$-$off point or can be process further and then sold for a higher price. The cost and selling price data for a recent period is as follows:

Sales Value

at Split$-$off

Point Cost to

Process

Further Sales Value

after Further

Processing

Product A $$49,200$ $$100,900$ $$190,200$

Product B $$10,600$ $$29,800$ $$35,600$

Using the above information answer the following questions.

Using incremental analysis, should Product B be sold at the split$-$off point or processed further and then sold?

Input the letter A if it should be sold at the split$-$off point.

Input the letter B if it should be processed further and then sold.

Would operating income increase or decrease if Product B was process further?

Enter the letter A for increase.

Enter the letter B for decrease.

By how much will operating income increase or decrease by if Product B was process further?

Enter your answer as a positive number even if operating income would decrease.