ock Corporation makes two products from a common input. Joint processing costs u

Question

ock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 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 Product Y Total Allocated joint processing costs 16,800 16,800 33,600 Sales value at split-off point $ 24,000 $ 24,000 $ 48,000 Costs of further processing $ 15,000 $ 18,700 $ 33,700 Sales value after further processing $ 35,500 $ 45,100 $ 80,600 What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? $31,800 $20,500 $16,800 $35,500

Explanation / Answer

Sales value after further processing 35500 Costs of further processing 15000 Minimum amount acceptable 20500 Option 2 is correct

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.