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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Exercise 13-31 Â Sell at Split-Off or Process Further
Bozo Inc. manufactures two products from a joint production process. The joint process  costs
$110,000 and yields 6,000 pounds of LTE compound and 14,000 pounds of HS compound. LTE can be sold at split-off for $55 per pound. HS can be sold at split-off for $9 per pound. A buyer of HS asked Bozo to process HS further into CS compound. If HS were processed further, it would  cost
$34,000 to turn 14,000 pounds of HS into 4,000 pounds of CS. The CS would sell for $45 per pound.
Required:
1.      What is the contribution to income from selling the 14,000 pounds of HS at split-off?
2.      CONCEPTUAL CONNECTION What is the contribution to income from processing the 14,000 pounds of HS into 4,000 pounds of CS? Should Bozo continue to sell the HS at split- off or process it further into CS?
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