Lamar Corporation uses a joint process to produce products A, B, and C. Each
product may be sold at splitoff or processed further and then sold. Joint processing-costs for the year amounted to $100,000. Other information is presented below:
Separable
Processing
Sales Value Costs after Sales Value
Product at Splitoff Splitoff at Completion
A $94,000 $28,000 $116,000
B 60,000 8,000 82,000
C 66,000 14,000 80,000
Required:
a. Which products, if any, should be processed further?
b. If all three products were processed further, what would be the effect on profits?