Iacollia Company makes two products from a common input. Joint processing costs
ID: 2376036 • Letter: I
Question
Iacollia Company makes two products from a common input. Joint processing costs up to the split-off point total $47,400 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
Product X
Product Y
Total
Allocated joint processing costs
23,700
23,700
47,400
Sales value at split-off point
33,600
33,600
67,200
Costs of further processing
21,700
21,100
42,800
Sales value after further processing
52,800
60,200
113,000
What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?(Input the amount as positive value. Omit the "$" sign in your response.)
What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?(Input the amount as positive value. Omit the "$" sign in your response.)
Iacollia Company makes two products from a common input. Joint processing costs up to the split-off point total $47,400 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
Explanation / Answer
a) sales increase = 52800 - 33600 = 19200
net monetary disadvantage = sales increase - cost after = 19200 - 21700 = (2500)
b) sales increase = 60200 - 33600 = 26600
net monetary advantage = 26600 - 21100 = 5500
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