Physical measure allocation Oregon Forests uses a joint process to manufacture two grades of wood: A and B. During October 2013, the company incurred $15,975,120 of joint production cost in producing 29,490,000 board feet of Grade A and 8,546,000 board feet of Grade B lumber. The company allocates joint cost on the basis of board feet of lumber produced. The company can sell Grade A lumber at the split-off point for $0.70 per board foot. Alternatively, Grade A lumber can be further processed at a cost of $0.69 per board foot and then sold for $1.45 per board foot. No opportunity exists for processing Grade B lumber after split-off.

a. How much joint cost should be allocated to Grade A and to Grade B lumber?

Grade A $ 12385800

Grade B $ 3589320

b. If Grade A lumber is processed further and then sold, what is the incremental effect on Oregon Forest net income? $ ______.____

Should the additional processing be performed? Yes

I am just having problems solving for b.