converted into two other products by adding 300,000 ounces of another compound ( TCP ) to the 300,000 ounces of table cleaner . This joint process will yield 300,000 ounces each of table stain remover ( TSR ) and table polish ( TP ). The additional processing costs for this process amount to $ 100,000 . Both table products can be sold for $ 14 per 25-ounce bottle .
The company decided not to process the table cleaner into TSR and TP based on the following analysis .
Instructions
1 . Determine if management made the correct decision to not process the table cleaner further by doing the following .
1 . Calculate the company ' s total weekly gross profit assuming the table cleaner is not processed further .
2 . Calculate the company ' s total weekly gross profit assuming the table cleaner is processed further .
( 2 ) Gross profit $ 186,000
3 . Compare the resulting net incomes and comment on management ' s decision .
2 . using incremental analysis , determine if the table cleaner should be processed further .
E8-2
Eckert Company is involved in producing and selling high-end golf equipment . The company has recently been involved in developing various types of laser guns to measure yardages on the golf course . One small laser gun , called Little Laser , appears to have a very large