ACCOUNTING 102-General Chemical Company (GCC) manufactures two

ACCOUNTING 102-General Chemical Company (GCC) manufactures two

Subject: Business / Accounting
Question
General Chemical Company (GCC) manufactures two products as part of a joint process: A1 and B1. Joint costs up to the split-off point total $21,500. The joint costs are allocated to A1 and B1 in proportion to their relative sales values. At the split-off point, product A1 can be sold for $31,200, whereas product B1 can be sold for $72,800. Product A1 can be processed further to make product A2, at an incremental cost of $37,500. A2 can be sold for $84,500. Product B1 can be processed further to make product B2, at an incremental cost of $47,500. B2 can be sold for $94,500.

Joint costs allocated to product A1 total:

Joint costs allocated to product B1 total:

The net change in operating income resulting from a decision to manufacture product A2 is:

The net change in operating income resulting from a decision to manufacture product B2 is: