Bergamit Company Manufactures Veterinary Products

Multiple Choice

Bergamit Company manufactures veterinary products.One joint process involves refining a chemical (dactylyte) into two chemicals dac and tyl.One batch of 10,000 gallons of dactylyte can be converted to 4,000 gallons of dac and 6,000 gallons of tyl at a total joint processing cost of $15,000.At the split-off point, dac can be sold for $5 per gallon and tyl can be sold for $7 per gallon.Bergamit has just learned of a new process to convert dac into prodac.The new process costs $5,000 and yields 2,500 gallons of prodac for every 3,000 gallons of dac.Prodac sells for $6 per gallon.
What is Bergamit's profit from refining one batch of dactylyte if both dac and tyl are sold at the split-off point?

A) $47,000
B) $25,000
C) $17,000
D) $36,000
E) $52,000