Determine if these 2 products product y and product z should

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Question

Juice company processes raw material X into joint products Y and Z.

Raw material X costs: $6 per liter

It costs $100 to convert these 100 liters into 60 Liters of Y and 40 liters of Z.

Product Y can be sold immediately for $8 per liter or processes further into product B at an additional cost of $2 per liter.

Product B can then be sold for $9 per liter.

Product Z can be sold immediately for $7 per liter or processed into product A at an additional cost of $5 per liter.

Product A can then be sold for $14 per liter.

Required:

Determine if these 2 products Product Y and Product Z should be sold at split off or processed further. Explain your decision. Provide the total dollar generated in income for each product at split off and if processed further. Provide a recommendation based on your analysis to income.

Reference no: EM132316611

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