Posh Pillows Manufactures Two Products, Pillows and Cushions, from a Joint

Multiple Choice

Posh Pillows manufactures two products, pillows and cushions, from a joint process. Pillows are allocated $7500 of the total joint costs of $25,000. There are 2500 pillows produced and 2500 cushions produced each year. Pillows can be sold at the split-off point for $10 per unit, or they can be processed further into a deluxe pillow for additional processing costs of $8400 and sold for $19 for each deluxe pillow. If the pillows are processed further and made into deluxe pillows, the effect on operating income would be

A) $25,000 net increase in operating income.
B) $14,100 net decrease in operating income.
C) $14,100 net increase in operating income.
D) $25,000 net decrease in operating income.