Determine which products should be sold at the split-off point and which should be processed further.
100) A company puts four products through a common production process. This process costs
$100,000 each year. The four products can be sold when they emerge from this process at the
“split-off point,” or processed further and then sold. Data about the four products for the
coming period are:
*Sales value after further processing:
Stroller: 20,000 lb. * $42/lb. = $840,000; Walker: 10,000 lb. * $28/lb. = $280,000;Jogger:
5,000 lb. * $58/lb. = $290,000; Runner: 5,000 lb. * $22/lb. = $110,000
**Sales value at split off:
Stroller: 20,000 lb. * $28/lb. = $560,000; Walker: 10,000 lb. * $7/lb. = $70,000
Jogger: 5,000 lb. * $36/lb. = $180,000; Runner: 5,000 lb. * $18/lb. = $90,000
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