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Good Earth Products produces orange juice and candied orange peels. A 1,000-pound batch of oranges, costing $400, is transformed using labor of $40 into 100 pounds of orange peels and 300 pints of juice. The company has determined that the sales value of 100 pounds of peels at the split-off point is $300 and the value of a pint of juice (not pasteurized or bottled) is $0.30. Beyond the split-off point, the cost of sugar-coating and packaging the 100 pounds of peels is $50. The cost of pasteurizing and packaging the 300 pints of juice us $150. A 100 pound box of candied peels is sold to commercial baking companies for $500. Each pint of juice is sold for $1.

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