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Answer (B) is correct . The decision to sell-or-process-further is determined by whether the incremental revenue from further processing exceeds the incremental cost. Only J-60 ? produces an incremental profit. B-40 J-60 H-102 Sales value after further processing $12.25 $ 5.70 $ 9.75 Less:? sales value at split-off (10.00) (4.00) (7.25) Incremental revenue per unit $??2.25 $ 1.70 $ 2.50 Less:? cost to process further (3.05) (1.00) (2.50) Incremental profit per unit $ (0.80) $ 0.70 $ 0.00

Answer (A) is incorrect because B-40 generates an incremental loss after further processing.
Answer (C) is incorrect because H-102 only breaks even after further processing.
Answer (D) is incorrect because B-40 and H-102 are the products that should not be processed further.