Question: Product Pounds Produced Sales Value at Split-Off Final Sales Value Additional Cost Sea Tea 9,000 $ 60,000 $ 90,000 $ 35,000 Sea Paste 6,800 74,000

Product

Pounds Produced

Sales Value at Split-Off

Final Sales Value

Additional Cost

Sea Tea 9,000 $ 60,000 $ 90,000 $ 35,000

Sea Paste 6,800 74,000 160,000 50,000

Sea Powder 2,000 70,000 85,000 14,000

Required: a-1. Compute the incremental benefit (cost) of further processing to these products. a-2. Which products should Kelp process beyond the split-off point? b. At what price per pound would it be advantageous for Kelp Company to sell Sea Paste at the split-off point rather than process it further?

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