Question
A Co. manufactures three products from a common input in a joint processing operation. All units of all three products can be sold at the
A Co. manufactures three products from a common input in a joint processing operation. All units of all three products can be sold at the split-off point. Alternatively, all three products can be further processed and all units after further processing can be sold. Information about the products is as follows:
Product | A | B | C |
Allocated costs at split-off | $50,000 | $90,000 | $60,000 |
Sales values at split-off | $100,000 | $180,000 | $120,000 |
Further processing costs | $70,000 | $80,000 | $24,000 |
Sales values after furthering processing | $160,000 | $300,000 | $150,000 |
Required: Which products should be sold at the split-off point and which should be further processed and sold after further processing? Show all of your work
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