Sell Now or Process Further Colorado Steak Company (CSC) uses a joint process to manufacture three types of beef:

roasts, steaks, and ground beef. Each product can be sold at the point of separation, or it can be processed further. All additional processing costs are directly traceable to each product that is processed further. Joint production costs for the year are $140,000 and are allocated to all three products on the basis of their sales values at the point of separation.

The pertinent data accumulated by the accounting department for these products are:

1. Which products should Colorado Steak Company process further (after separation) in order to maximize its profits? Show computations.
2. Explain why you did or did not use the allocated joint costs in deciding which of the products to process further

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Product Units Steak Roast 18,000 20,000 Ground 10,000 Sales Value at Separation $150,000 120,000 Allocation of Joint Costs $70,000 56,000 30,000 14,000 Sales Value and Additional Costs of Processing Further Sales Value Additional Costs $190,000 $24,000 150,000 40,000 60,000 25,000