Processing one batch of the common input

Reference no: EM13258342

Farrugia Corporation produces two intermediate products, A and B, from a common input. Intermediate product A can be further processed into endproduct X. Intermediate product B can be further processed into endproduct Y. The common input is purchased in batches that cost $36each and the cost of processing a batch to produce intermediate products A and B is 15$. Intermediate product A can be sold as isfor $21 or processed further for $14 to make end product x that issold for $32. Intermediate product B can be sold as is for $44 orprocessed further for $28 to make end product Y that is sold for$64.

Required:

a. Assuming that no other costs are involved in processing potatoesor in selling products, how much money does the company make from processing one batch of the common input into the end products Xand Y? Show work

b. should each of the intermediate products A and B be sold as is or processed further into an end product? Explain.

Reference no: EM13258342

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