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Lone Star Meat Packers 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 they are initially cut or to process them further into filet mignon and the New York cut.
If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit:
Selling price ($2.20 per pound) Less joint costs incurred up to the split-off point where T-bone steak can be identified as a separate product Profit per pound

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