5 Wexpro, Inc., produces several products from processing 1ton of clypton, a rar

Question

5 Wexpro, Inc., produces several products from processing 1ton of clypton, a rare mineral. Material and processing costs total $80,000 per ton, one-fourth of which is allocated to product X15. Seven thousand seven hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $13 each, or processed further at a total cost of $8,300 and then sold for $19 each. 0.16 points Required: 1. What is the financial advantage (disadvantage) of further processing product X15? 2. Should product X15 be processed further or sold at the split-off point? eBook Print References 2.|Product X1 5 should be

Explanation / Answer

1) Calculate financial advantage (disadvantage) of further processing :

Financial advantage (disadvantage) = (19-13*7700)-8300 = 37900

2 ) Product X15 should be further processing

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