Question
39 Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $48,500 a year. The company
39 Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $48,500 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: Allocated joint processing costs Sales value at split-off point 03:24:41 Costs of further processing Sales value after further processing Product X $29,100 $ 30,000 $ 24,800 $ 49,000 Product Y $ 19,400 $20,000 $19,100 $59,500 Total $ 48,500 $ 50,000 $ 43,900 $108,500 Required: a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.) b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point? d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point? a. b. c. Minimum acceptable amount d. Minimum acceptable amount
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started