To conduct an experiment, AMC increased movie ticket prices from $9 to $10 and measured the change in ticket sales. Using the data over the following month, they concluded that the increase was profitable. However, over the subsequent months, they changed their minds and discontinued the experiment. How did the timing affect their conclusion about the profitability of increasing prices?
Assume a company has two products A and B, that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $13,400 and then sold for $25 per unit.
What is the financial advantage (disadvantage) of further processing Product A?
a. $(4,600)
b. $4,600
c. $(22,000)
d. $22,000
