laukea Company makes two products from a common input. Joint processing costs up
ID: 2482375 • Letter: L
Question
laukea Company makes two products from a common input. Joint processing costs up to the split-off point total $80,000 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: Allocated joint processing costs Sales value at split-off point Cost of further processing Sales value after further processing Product X $ 32,000 $ 31,600 $ 29,400 $ 58,200 Product Y $ 48,000 $45,600 $ 23,700 $72,500 Tota $ 80,000 $ 77,200 $ 53,100 $130,700 Required a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? (Input the amount as a positive value.) Click to select) b. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? (Input the amount as a positive value.) Click to select) c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? Minimum amount d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? Minimum amountExplanation / Answer
a) Sales value of X after further processing Costs of further processing of X Net monetory advantage of processing of X beyond split off poiny b) Sales value of Y after further processing Costs of further processing of Y Net monetory advantage of processing of Y beyond split off poiny c) Minimum amount the company should accept for product X if it is to be sold at the split-off point = Allocated joint cost of X = $32,000 d) Minimum amount the company should accept for product Y if it is to be sold at the split-off point = Allocated joint cost of Y = $48,000
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