Payne Company Makes Two Products, M and N, in a Joint

Multiple Choice

Payne Company makes two products, M and N, in a joint process. At the split-off point, 40,000 units of M and 50,000 units of N are available each month. Monthly joint production costs are $270,000.
Product M can be sold at the split-off point for $4.20 per unit. Product N can either be sold at the split-off point for $3.20 per unit or it can be processed further and sold for $6.30 per unit. If N is processed further, additional processing costs of $2.50 per unit will be incurred.
-If N is processed further and then sold,rather than being sold at the split-off point,the change in monthly operating income would be a:

A) $30,000 increase
B) $315,000 increase
C) $155,000 increase
D) $125,000 decrease