Lincoln Company makes three products from a common input. Joint processing costs up to the split-off...

 

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Lincoln Company makes three products from a common input. Joint processing costs up to the split-off point total $500,000 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 Product Z Sales value at split-off point $300,000 $275,000 $195,000 Costs of further processing $125,000 $ 210,000 $135,000 Sales value after further processing $ 534,000 $450,000 $360,000 Required: (a) What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (b) What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? (c) What is financial advantage (disadvantage) of processing Product Z beyond the split-off point? (d) Which product or products should be sold at the spilt-off point and which product or products should be processed further? Lincoln Company makes three products from a common input. Joint processing costs up to the split-off point total $500,000 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 Product Z Sales value at split-off point $300,000 $275,000 $195,000 Costs of further processing $125,000 $ 210,000 $135,000 Sales value after further processing $ 534,000 $450,000 $360,000 Required: (a) What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (b) What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? (c) What is financial advantage (disadvantage) of processing Product Z beyond the split-off point? (d) Which product or products should be sold at the spilt-off point and which product or products should be processed further?