(Processing beyond split-off and cost allocations) Sunshine Products has a joint process that makes three products. Joint cost for the process is $30,000.

Alpha, Beta, and Gamma weigh 10 pounds, 6 pounds, and 2 pounds, respectively.

a. Determine which products should be processed beyond the split-off point.

b. Determine whether Gamma should be treated as a joint product or a by¬ product. Allocate the joint processing cost based on units produced, weight, and approximated net realizable value at split-off. If necessary, use the net realizable value method in accounting for any by-products.LO1 

Transcribed Image Text:

PER UNIT PRODUCT UNITS OF OUTPUT AT SPLIT-OFF SELLING PRICE INCREMENTAL PROCESSING FINAL SELLING COSTS PRICES Alpha 5,000 $2.00 $1.50 $3.00 Beta 10,000 1.00 2.00 6.00 Gamma 250 1.50 .20 1.80