Kirk Minerals processes materials extracted from mines. The most common raw mate

Question

Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $178,900 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product.

Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Indicate whether each of the three joint products should be sold as is, or processed further.

Sales Value at
Split-Off Point Allocated
Joint Costs Cost to Process
Further Sales Value of
Processed Product Spock $210,100 $40,400 $110,800 $300,300 Uhura 299,900 59,400 85,900 399,500 Sulu 455,000 79,100 250,300 800,900

Explanation / Answer

$ 178,900 Sales Value at Split-Off Point Allocated Joint Costs Cost to Process Further Sales Value of Processed Product Incremental Price Incremental Profit(Loss) A B C C-A = D D-B Spock $ 210,100 $ 40,400 $ 110,800 $ 300,300 $ 90,200 $ -20,600 Sold as is Uhura 299,900 59,400 85,900 399,500 $ 99,600 $ 13,700 Process further Sulu 455,000 79,100 250,300 800,900 $ 345,900 $ 95,600 Process further

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