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(Solved): Chemex produces three products ( A,B, and C ) from the same common input (x),50,000 pounds of x will ...



Chemex produces three products (

A,B

, and

C

) from the same common input

(x),50,000

pounds of

x

will yield

25,000lbs

. of

A,15,000lbs

. of

B

, and

10,000lbs

. of C . The sales values at the split-off point of

A,B

, and C are

$4

per

lb,$5

per lb , and

$6

per lb , respectively. B can be sold at the split-off point or processed further at an additional cost of

$20,000

. If processed further, B can be sold for

$6

per Ib . There is no loss in the manufacturing process. Should B be sold at the split-off point or processed further and what is the difference in profit between the alternatives?

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