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11 (3 points) Cozy Company produces various textiles from polyester. Joint processing costs up to the split-off point are $25,000 per year. The company allocates
11 (3 points) Cozy Company produces various textiles from polyester. Joint processing costs up to the split-off point are $25,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. These values at the split-off point are as follows: Product Area Rugs Throw Pillows Joint processing costs $11,800 $13,200 Sales value $23,000 $25,750 Each product may be sold at the split-off point or processed further with special designs. Additional processing requires no special facilities. The additional processing costs and the sales value after further processing for each product are shown below: Required: Product Area Rugs Throw Pillows Additional processing costs $8,815 $20,050 Sales value $33,000 $43,625 1. Calculate the incremental profit (loss) for Throw Pillows only. (2 marks) 2. Should Throw Pillows be process further? Why or why not? (1 mark) Paragraph V BI U A + Ma
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