managerial accounting step by step calculations for this problem??? EYERCISE 12-

Question

managerial accounting step by step calculations for this problem???

EYERCISE 12-6 Sell or Process Further [L02] m ioint processing operation, Nolen Company manufactures three products from a common input. loint processing costs up to the split-off point total $120,000 per year. The company allocates these coss to the joint products on the basis of their total sales value at the split-off point. These sales values are as follows: product X, $60,000; product Y, $108,000; and product Z, $72.000. Each product may be sold at the split-off point or processed further. Additional processing rexuires no special facilities. The additional processing costs and the sales value after further pro- cessing for each product (on an annual basis) are shown below: Additional Sales Processing Costs Value Product X. Y. $42,000 $48,000 $14,400 $ 96,000 $180,000 $ 90,000 Required: Which product or products should be sold at the split-off point, and which product or products should be processed further? Show computations.

Explanation / Answer

Determination product should be further processing or not :

Product Y and product Z should be further processed but Product x should be sold at split off point.

Product x Product Y Product Z Sale after further processing 96000 180000 90000 Sale at split off point (60000) (108000) (72000) Incremental revenue 36000 72000 18000 Incremental cost (42000) (48000) (14400) Incremental profit (6000) 24000 3600

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