autry company manufactures veterinary products. one joint process involves refining a chemical (dactylyte) into two chemicals: dac and tyl. one batch of 5,000 gallons of dactylyte can be converted to 2,000 gallons of dac and 3,000 gallons of tyl at a total joint processing cost of $12,000. at the split-off point, dac can be sold for $3 per gallon and tyl can be sold for $4 per gallon. autry has just learned about a new process to convert dac into prodac. the new process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. prodac sells for $5 per gallon.should autry process dac further?

Question

04-11-2022
Business

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autry company manufactures veterinary products. one joint process involves refining a chemical (dactylyte) into two chemicals: dac and tyl. one batch of 5,000 gallons of dactylyte can be converted to 2,000 gallons of dac and 3,000 gallons of tyl at a total joint processing cost of $12,000. at the split-off point, dac can be sold for $3 per gallon and tyl can be sold for $4 per gallon. autry has just learned about a new process to convert dac into prodac. the new process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. prodac sells for $5 per gallon.should autry process dac further?

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kumarkrishna kumarkrishna · Answer 1 · 2022-11-08T08:24:59-05:00

New process costs $4,000 and yields 1,700 gallons of prodac for every 2,000 gallons of dac. prodac sells for $5 per gallon Income will be $1,500 lower.

Sales Value once Dac has been converted into prodac (1700 liters times $5)

$8,500

Less: Sales Value (2000 dac*$3) at the split-off point.

$6,000

$2,500 in Additional Profit

Less: Cost of additional processing: $4,000

Incremental Loss of $1,500 if processed further

Imperial units and US customary units both use the gallon as a unit of volume. Currently, three versions are in use: 4.54609 liters is the definition of an imperial gallon. Income is an entity's ability to save and spend money during a given period of time, and it is typically expressed in monetary terms. [1] Conceptually, income can be difficult to define, and there may be variations depending on the field. [2] [Page Required] A person's income in an economic sense, for instance, can differ from their income in a legal sense.

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