Asked by Tristan Jansen on Jun 21, 2024
Verified
Faustina Chemical Corporation manufactures three chemicals (TX14, NJ35, and KS63) from a joint process.The three chemicals are in industrial grade form at the split-off point.They can either be sold at that point or processed further into premium grade.Costs related to each batch of this chemical process is as follows: 
For which product(s) above would it be more profitable for Faustina to sell at the split-off point rather than process further?
A) TX14 only
B) KS63 only
C) TX14 and KS63 only
D) NJ35 and KS63 only
Joint Process
A manufacturing operation that produces multiple products simultaneously from the same process or raw materials, often seen in industries like chemicals or agriculture.
Premium Grade
Premium grade typically refers to products or materials that are of higher quality and therefore command a higher price.
Split-Off Point
The moment in the production process where multiple products become distinguishable from one another, and individual cost tracking can begin.
- Analyze the economic advantage of enhancing the processing of products versus offering them as partially completed goods.
Verified Answer
BB
Benlevite Ben IsraelJun 27, 2024
Final Answer :
A
Explanation : 
NJ35 and KS63 should be processed further, but TX14 should be sold at the split-off point.
Reference: CH11-Ref1
Ouzts Corporation is considering Alternative A and Alternative B.Costs associated with the alternatives are listed below:
NJ35 and KS63 should be processed further, but TX14 should be sold at the split-off point.Reference: CH11-Ref1
Ouzts Corporation is considering Alternative A and Alternative B.Costs associated with the alternatives are listed below:
Learning Objectives
- Analyze the economic advantage of enhancing the processing of products versus offering them as partially completed goods.