A company produces three products Good, Better, and Best. All the three products are processed from a single raw material input. Product “Better" however, can be processed further at an annual cost of $30,000. The processed product will generate an annual revenue of $90,000 against the annual revenue generated for $55,000 at the split-off point. What is the financial advantage/disadvantage to process the product “Better" further? a. The annual financial advantage to process the product “Better" further is $35,000. b. The annual financial disadvantage to process the product “Better" further is $35,000. c. The annual financial advantage to process the product “Better" further is $5,000. d. The annual financial disadvantage to process the product “Better" further is $25,000. Answer OA OB OD Submit

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7PB: Abilene Industries manufactures and sells three products (XX, W, and ZZ). The sales price and unit...
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A company produces three products Good, Better, and Best. All the three products are
processed from a single raw material input. Product “Better" however, can be processed
further at an annual cost of $30,000. The processed product will generate an annual revenue
of $90,000 against the annual revenue generated for $55,000 at the split-off point. What is
the financial advantage/disadvantage to process the product “Better" further?
a. The annual financial advantage to process the product “Better" further is $35,000.
b. The annual financial disadvantage to process the product "Better" further is
$35,000.
c. The annual financial advantage to process the product “Better" further is $5,000.
d. The annual financial disadvantage to process the product "Better" further is
$25,000.
Answer
A
OB
Oc
OD
Submit
Transcribed Image Text:A company produces three products Good, Better, and Best. All the three products are processed from a single raw material input. Product “Better" however, can be processed further at an annual cost of $30,000. The processed product will generate an annual revenue of $90,000 against the annual revenue generated for $55,000 at the split-off point. What is the financial advantage/disadvantage to process the product “Better" further? a. The annual financial advantage to process the product “Better" further is $35,000. b. The annual financial disadvantage to process the product "Better" further is $35,000. c. The annual financial advantage to process the product “Better" further is $5,000. d. The annual financial disadvantage to process the product "Better" further is $25,000. Answer A OB Oc OD Submit
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