Stars Manufacturing Company produces Products A1, B2, C3, and D4 through a joint process. The joint costs amount to $200,000.

If Processed Further

Product Units Produce Sales Value at Split-Off Additional Costs Sales Value

A1 3,000 $10,000 $2,500 $15,000

B2 5,000 30,000 3,000 35,000

C3 4,000 20,000 4,000 25,000

D4 6,000 40,000 8,000 45,000

If Product D4 is processed further, profits will

The increase or decrease in profit due to further processing instead of selling product D4 at split off point is the sales price after further processing minus sales price at split off and the additional cost of further processing.

For product D4,the sales price after further processing is $45,000,the sales value at split off is while additional cost of further processing is$40,000 $8,000,the decrease in profit of further processing is $3,000($45,000-$8,000-$40,000),the amount by which profit would decrease