Answer Happy

BioMorphs Corporation produces three products in a monthly jointproduction process. During the first stage of the process liquidsand chemicals costing $60,000 are heated and three differentcompounds emerge: 3,000 gallons of Molecue worth $22 per gallon arecreated from the steam; 10,000 gallons of Borphue worth $15 aredrained from the tank; and 1,000 gallons of the tank residue,labeled as Polygard, are sold as fertilizer for $5.50 per gallon.Before Molecue is sold, it must be purified in another process thatcosts $10,000, and before the Polygard fertilizer is sold, it mustbe bottled at a price of $1.50 per gallon.
a. What is the profitability of the jointprocess?
b. Is it profitable to process Molecuefurther if it can be sold at split-off for $5 per gallon?
c. BioMorphs has an offer to sell Polygardbulk at the split-off point without bottling for $3,500 per month.What is the incremental profit (loss) to BioMorphs if it acceptsthe offer?