The Wyeth Corporation produces three products, A, B, and C, from a single raw material input. Product A can be sold at the split off point for $40,000, or it can be processed further at a total cost of $15,000 and then sold for $58,000. Joint costs total $60,000 annually. Product A should be: Multiple Choice discontinued because revenues after further processing are less than total joint costs. sold at the split-off point. processed further and then sold. processed further only if its share of the total joint costs is less than the incremental revenues from further processing.

processed further and then sold.

Explanation:

Final sales value after further processing$58,000  

Less sales value at split-off point  40,000  

Incremental revenue from further processing  18,000  

Less cost of further processing  15,000  

Financial advantage (disadvantage) from further processing$3,000  

the answer is a. $209,000

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