BioMorphs Corporation produces three products in a monthly joint production process. During the first stage...
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BioMorphs Corporation produces three products in a monthly joint production process. During the first stage of the process liquids and chemicals costing $ are heated and three different compounds emerge: gallons of Molecue worth $ per gallon are created from the steam; gallons of Borphue worth $ per gallon are drained from the tank; and gallons of the tank residue, labeled as Polygard, are sold as fertilizer for $ per gallon. Before Molecue is sold, it must be purified in another process that costs $ and before the Polygard fertilizer is sold, it must be bottled at a price of $ per gallon. Required: What is the profitability of the joint process? Is it profitable to process Molecue further if it can be sold at splitoff for $ per gallon? BioMorphs has an offer to sell Polygard bulk at the splitoff point without bottling for $ per month. What is the incremental profit loss to BioMorphs if it accepts the offer?
BioMorphs Corporation produces three products in a monthly joint production process. During the first stage of the process liquids and chemicals costing $ are heated and three different compounds emerge: gallons of Molecue worth $ per gallon are created from the steam; gallons of Borphue worth $ per gallon are drained from the tank; and gallons of the tank residue, labeled as Polygard, are sold as fertilizer for $ per gallon. Before Molecue is sold, it must be purified in another process that costs $ and before the Polygard fertilizer is sold, it must be bottled at a price of $ per gallon.
Required:
What is the profitability of the joint process?
Is it profitable to process Molecue further if it can be sold at splitoff for $ per gallon?
BioMorphs has an offer to sell Polygard bulk at the splitoff point without bottling for $ per month. What is the incremental profit loss to BioMorphs if it accepts the offer?
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