cson Corporation has a joint process that produces three products: X, Y and Z. E

Question

cson Corporation has a joint process that produces three products: X, Y and Z. Each product may be sold at split-off or processed further and then sold. Joint-processing costs for a year amount to $100,000. Other data follows: Sales Value at Completion Sales Valu Separable Processing Product Costs after Split-Off $16,000 26,000 20,000 $128,000 $160,000 75,000 32,600 99,000 50,000 Processing Product X beyond the split-off point will cause profits to A) increase $32,000 C) decrease $16,000 B) increase $16,000 D) decrease $32,000

Explanation / Answer

Answer is B Increase @16000

Sales Value at completion 160000 Sales Value at Split off 128000 Incremental revenue 32000 Less Additional cost 16000 Increase in Profit 16000

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