Kelp 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
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 5,800 83,000 160,000 50,000
Sea Powder 2,000 70,000 85,000 14,000
a-1Compute the Incremental benefit (cost) of further processing to these products. (Negative amounts should be indicated by a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)
Sea Tea Sea Paste Sea PowderIncremental benefit (cost) $ $ $
a-2Which products should Kelp process beyond the split-off point?
Sea powder and sea paste
Sea tea and sea powder
Sea tea and sea paste
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? (Round your intermediate calculations and final answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)