Question 5 Brockton Company produces products A, B, and C from a joint productio

Question

Question 5

Brockton Company produces products A, B, and C from a joint production process. Each

        product may be sold at split-off or processed further. Joint production costs have been allocated

       to each product based on the number of each produced.

Product       Units Produced           Sales Value            Additional Sales Values and Costs if

                                                       At Split-off             ________Processed Further_______            

                                                                                      Sales Values                Added Costs

A                    6,000                       $ 75,000                  $100,000                       $22,000

B                    9,000                       $ 70,000                  $ 115,000                      $30,000

C                    4,000                       $ 48,000                  $   58,000                      $12,000

Which product(s) should be processed beyond the split-off point?

Explanation / Answer

(a) (b) " ( c) (d) =(b)- ( c) Product Units Produced Sales Value at Splitoff Additional Sales Values and Costs if further processed Additional Costs NRV due to Further process Compare(a) & (d) & select which is favourable A 6000 75000 100000 22000 78000 Sale at Further Process B 9000 70000 115000 30000 85000 Sale at Further Process C 4000 48000 58000 12000 46000 Sale at Splitoff

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