A Joint Production Process at Happy Days Farms Results in Two

A joint production process at Happy Days Farms results in two products, blackberry syrup and blackberry jam. The following cost and activity data relate to these two products: Blackberry syrup can be sold as-is (at the split-off point) for $2.50 per unit, or it can be processed further into a specialty blackberry juice and then sold for $5.00 per unit. If blackberry syrup is processed further into the specialty blackberry juice, what would be the overall effect on operating income?

A) $1,750 net increase in operating income
B) $1,750 net decrease in operating income
C) $3,750 net increase in operating income
D) $3,750 net decrease in operating income

Correct Answer:

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