Served Inc

Multiple Choice

Served Inc. manufactures two products, salad plates and platters, from a joint process. Salad plates are allocated $7900 of the total joint costs of $26,000. There are 3500 salad plates produced and 3500 platters produced each year. Salad plates can be sold at the split-off point for $10 per unit, or they can be hand painted for additional processing costs of $8600 and sold for $19 for each deluxe salad plate. If the salad plates are processed further and made into deluxe plates, the effect on operating income would be

A) $35,000 net increase in operating income.
B) $22,900 net decrease in operating income.
C) $35,000 net decrease in operating income.
D) $22,900 net increase in operating income.