Lance is in little league, learning to play baseball. unfortunately, he is standing too far away from the plate, and it is making his coach very upset. in order to make lance stop standing so far from the plate, the coach rings a loud bell every time little lance is more than six inches from the plate. the bell startles lance, and he doesn’t like it, so he moves closer to the plate. in this case, the sound of the bell serves as for lance’s behavior of standing too far from the plate.

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer