What is the benefit or loss of processing further

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Question: A company produces chemicals for other chemical industries. In one joint process, 10 000 litres of HF5 are processed into 7 000 litres of X5 and 3 000 litres of B5. The cost of the joint process, including the HF5, is $40 000. They allocate $28 000 of the joint cost to the X5 and $12 000 of the cost to the B5. The 3 000 litres of B5 can be sold at the split-off point for $5 000, or they can be processed further into a product called K5. The sales value of 3 000 litres of K5 is $20 000, and the additional processing cost is $15,500.
What is the benefit or loss of processing further?

Enter a positive number for benefit and a negative number for loss.

Reference no: EM133372453

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