India Corporation Has $200,000 of Joint Processing Costs and Is

India Corporation has $200,000 of joint processing costs and is studying whether to process J and K beyond the split-off point. Information about J and K follows. $\begin{array} { | l | r | r | } \hline & \text { Product J } & \text { Product K } \\\hline \text { Tons produced } & 25,000 & 15,000 \\\hline \text { Scparable variable processing eosts bcyond split-olI } & \$ 64,000 & \$ 100.000 \\\hline \text { Selling price per ton at split-off } & 15 & 52 \\\hline \text { Selling price per ton after additional processing } & 21 & 58 \\\hline\end{array}$ If India desires to maximize total company income, what should the firm do with regard to Products J and K? $\begin{array} { | l | l | l | } \hline & \text { Product J } & \underline { \text { Product K } } \\\hline 1 & \text { Sell at split-off } & \text { Sell at split-off } \\\hline 2 & \text { Sell at split-off } & \text { Process beyond split-off } \\\hline 3 & \text { Process beyond split-off } & \text { Sell at split-off } \\\hline 4 & \text { Process beyond split-off } & \text { Process beyond split-off } \\\hline 5 & \text { There is not enough information to judge. } \\\hline\end{array}$

A) 1
B) 2
C) 3
D) 4
E) 5

Correct Answer:

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