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

Question

Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $55,000 per ton, one-fourth of which is allocated to product X15. Eight thousand six hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $14 each, or processed further at a total cost of $7100 and then sold for $17 each. 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? 2. Product X15 should be

Explanation / Answer

1) Calculate financial advantae (dsiadvantage)

product should be sold after further processing

Revenue after further processing (8600*17) 146200 Revenue at split off point (8600*14) (120400) Incremental revenue 25800 Less: Incremental cost (7100) Incremental profit /Disadvantage 18700

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

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