(Processing beyond split off) Crews Cannery makes three products in a single joint process. For 2000, the firm processed all three products beyond the split off point. The following data are generated for the year:
|
Joint |
||
|
Product |
Final Revenues |
Incremental Separate Costs |
|
Candied peaches |
$62,000 |
$26,000 |
|
Peach jelly |
74,000 |
38,000 |
|
Peach jam |
27,000 |
15,000 |
Analysis of 2000 market data reveals that these three products could have been sold at split off for $40,000, $40,000, and $10,000, respectively.
a. Evaluate, based on hindsight, management’s production decisions in 2000.
b. How much additional profit could the company have generated in 2000 with a better ability to forecast prices?