Abilene Meat Processing Corporation is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand. and it is trying to decide whether to sell the T-bone steaks as is or to process them further into let mignon and New York cut steaks.
Management believes that a I-pound T-hone steak would yield the following profit:

Wholesale Selling price ($2.20 per pound) $ 2.20
Less joint costs incurred up to the split-off point where
T-bone steak can be identified as a separate product 1.60
Profit per pound $ 0.60

If the company were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the filet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6-ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. It costs $0.16 to further process one T-bone steak into the filet mignon and New York cuts. The filet mignon can be sold for $4.00 per pound, and the New York cut can be sold for $3.30 per pound.
Required:
1. Determine the prot per pound from processing the T-bone steaks further into let mignon and New York cut steaks.
2. Would you recommend that the T-bone steaks be sold as is or processed further? Why?