ACTG 2300 Lecture 13: Day 13 Notes
7 Feb 2017
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Increase in net operating income: only include the . 50 in variable s&a because we haven"t sold it. Profits will increase by ,000 if buy. This will leave them with 350,000 less in oi if they drop linens. Can always work on product to improve it and sell for higher price. At what point does it make sense to stop improving and start selling. In same process, they obtain multiple products: common material, common process, split off point (sop, pdtx (psop and vsop, pdtx+ (final p and final v, pdty, pdtx, output of joint productions are joint products. From here, you can split production (called split-off point: into nutella, into chocolate candy. Always irrelevant for the decision of processing further because it is a sunk cost. You incur these costs whether you process further or not. Product a: p = per pound, = ,000. Final product a: p = per pound, v = 15,000 pounds.
