Corrosion Chemical Co. produces several chemical compounds. Each compound can be sold at the split-off point or processed further. The following results apply to October 2012:
|
Compound
|
Sales Value at Split-off Point
|
Costs of Additional Processing
|
Sales Value After Additional Processing
|
|
Chem I
|
$59,600
|
$7,300
|
$74,400
|
|
Chem II
|
70,700
|
17,500
|
82,600
|
|
Chem III
|
46,700
|
6,200
|
55,500
|
Corrosion's manager was asked which products should be sold at the split-off point and which should be processed further. Complete the following analysis started by the manager.
A. Based on the following, what should they recommend?
B. What would total revenue be if they sell each of the chemicals at their most profitable point? (Points : 6)