value: 6.00 points laukea Company makes two products from a common input. Joint
ID: 2544023 • Letter: V
Question
value: 6.00 points laukea Company makes two products from a common input. Joint processing costs up to the split-off point total $47,700 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 ProductY Total Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing $18,600 $29,100 $ 47,700 $25,750 $ 37,700 63,450 $23,100 $17,400 $ 40,500 $48,400 $56,100 104,500 Required a. What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? (Input the amount as a positive value. Omit the "$" sign in your response.) Net advantage b. What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? (Input the amount as a positive value. Omit the "$" sign in your response.) Net advantage c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? (Omit the "$" sign in your response.) Minimum acceptable 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? (Omit the "$" sign in your response.) Minimum acceptable amountExplanation / Answer
a.
Incremental sale value of product X = Sale value after further processing - Sale value at split off
= 48,400 - 25,750
= 22,650
Costs of further processing = 23,100
Net disadvantage = Cost of further processing - Incremental sale value
= 23,100 - 22,650
= 450
-----------------------------------------------------------------------------------------------
b.
Incremental sale value of product Y = Sale value after further processing - Sale value at split off
= 56,100 - 37,700
= 18,400
Costs of further processing = 17,400
Net advantage = Incremental sale value - Cost of further processing
= 18,400 - 17,400
= 1,000
-----------------------------------------------------------------------------------------------
c.
Minimum acceptable amount if sold at split off point = Allocated joint processing costs
= 18,600
-----------------------------------------------------------------------------------------------
d.
Minimum acceptable amount if sold at split off point = Allocated joint processing costs
= 29,100
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.