Question
A company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per
| A company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
| |||||||||||||
| Product | Selling Price | Quarterly Output | |||||||||||
| A | $ | 4 | per pound |
| 10,000 | pounds | |||||||
| B | $ | 7 | per pound |
| 22,000 | pounds | |||||||
| C | $ | 14 | per gallon |
| 5,000 | gallons | |||||||
| Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: | |||||||||||||
| Product | Additional Processing Costs | Selling Price |
| ||||||||||
| A | $ | 53,000 |
| $ | 6 | per pound |
| ||||||
| B | $ | 38,000 |
| $ | 10 | per pound |
| ||||||
| C | $ | 18,000 |
| $ | 18 | per gallon |
| ||||||
|
| |||||||||||||
Which products should be processed further?
Multiple Choice
-
A and B
-
B and C
-
A and C
-
A, B, and C
A company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
Product
Selling Price
Quarterly Output
A
$
4
per pound
10,000
pounds
B
$
7
per pound
22,000
pounds
C
$
14
per gallon
5,000
gallons
Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below:
Product
Additional Processing Costs
Selling Price
A
$
53,000
$
6
per pound
B
$
38,000
$
10
per pound
C
$
18,000
$
18
per gallon
Which products should be processed further?
Multiple Choice
-
A and B
-
B and C
-
A and C
-
A, B, and C
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Monitoring And Auditing Practices For Effective Compliance
Authors: John E. Steiner
2nd Edition
0977843017, 978-0977843015
