The Wyeth Corporation produces three products, A, B, and C, from a single raw material input. Product A can be sold at the splitoff point for $40,000, or it can be processed further at a total cost of $15,000 and then sold for $58,000. Joint costs total $60,000 annually. Product A should be:
A. processed further and then sold.
B. discontinued because revenues after further processing are less than total joint costs.
C. processed further only if its share of the total joint costs is less than the incremental revenues from further processing.
D. sold at the split-off point.
Answer: A
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