Buckle Company produces three joint products from seaweed. At the split-off point, three basic products emerge: Sea Tea, Sea Paste, and Sea Powder. Each of these products can either be sold at the split-off point or be processed further. If they are processed further, the resulting products can be sold as delicacies to health food stores. Cost and revenue information is as follows: Sales Value and Additional Costs If Processed Further Pounds Sales Value Final Sales Additional Product Produced at Split-Off Value Cost Sea Tea 9,000 $ 60,000 $ 90,000 $ 35,000 Sea Paste 5,700 84,900 160,000 50,000 Sea Powder 2,000 70,000 85,000 14,000 a-1 Compute the Incremental benefit (cost) of further processing to these products.
Sea Tea Sea Paste Sea Powder Incremental benefit $ $a-2 Which products should Buckle process beyond the split-off point? O Sea tea and sea paste O Sea paste and sea powder O Sea powder and sea tea b. At what price per pound would it be advantageous for Buckle Company to sell Sea Paste at the split-off point rather than process it further?