Phillippe Manufactures a and B from a Joint Process (Cost

Multiple Choice

Phillippe manufactures A and B from a joint process (cost = $80,000) . Ten thousand pounds of B can be sold at split-off for $15 per pound or processed further at an additional cost of $20,000 and later sold for $16. If Phillippe decides to process B beyond the split-off point, operating income will:

A) increase by $10,000.
B) increase by $20,000.
C) decrease by $10,000.
D) decrease by $20,000.
E) decrease by $58,000.