Brittany Furniture Manufactures Two Products, Pillows and Cushions, from a Joint

Multiple Choice

Brittany Furniture manufactures two products, pillows and cushions, from a joint process.Pillows are allocated $7,000 of the total joint costs of $25,000.There are 2,500 pillows produced and 2,500 cushions produced each year.Pillows can be sold at the split-off point for $12 per unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,000 and sold for $16 for each deluxe pillow.By how much will operating income change if the company chooses to process deluxe pillows?

A) $32,000 net increase in operating income
B) $23,000 net increase in operating income
C) $2,000 net increase in operating income
D) $30,000 net increase in operating income
E) $3,000 net decrease in operating income