(a) Highlight the correct answers for the following questions Each question carries Products A, B C are produced from single raw material input The raw material costs are $90,000 from which 5,000 units of A, 10,000 units of B and 15,000 units of C can be produced each period ProductA can be sold at the split off point for $2 unit, or it can be processed further at a cost of $12,500 then sold for $5 unit What is the correct course of action regading Product A It should be sold at the split off point, since further processing would result in a loss of 50 unit It should be processed further, since this will increase profits by $2,500 each period It should be sold at the split off point, since further processing will result in a loss of $2,500 each period It should be processed further, since this will increase proifts by $12,500 each period 1b) Whatis a joint product Any product that consists of several parts Any product produced by a firm with more that one product line Any product involved in a make or buy decision One of several proucts from a common input 1c) The Lantern Corp has 1,000 obsolete lanterns that are carried in Inventory with a mg cost of $20,000 If the lanterns are re machined for $5,000, they could be sold for $9,000 Alternatively the lanterns could be sold for scrap for $1,000 Which alternative is more desirable what are the total relevant costs for that alternative Re machine $5,000 Re machine $25 000 Scrap $20,000 Scrap $19 000 1d) Deciding what to do with a product from the split off point forward is known as a A) Joint Cost Analysis B) Gross Margin Analysis C) Sell or Process further decision D) CVP Analysis 1e) An example of an Industry where a of end products are produced from a single raw material input Publishing Petroleum refining Hospitality Furniture B) WP Company produces products X,Y Z from a single raw material input in a joint production process Budgeted data for the next month is as follows C) Benjamin Signal Co produces products R,J C from a joint production process Each product may be sold at the split off pint or be processed further Joint product costs of $92,000 per year are allocated to the products based on the relative of units produced Data is shown below Required Which products) should be processed beyond the split oft Show your calculations Answer below The cost of the joint raw material input is $149,000 Which of the products should be processed beyond the split off pint (Show Calculations ) Product R can be processed beyond the split off point for an additional cost of $26,000 can then be sold for $105,000 Product J can be proecessed beyond the split off point for an additional cost of $38,000 can then be sold for $117,000 Product C can be processed beyond the sipit off point for an additional $12,000 can then be sold for $57,000

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(a) Highlight the correct answers for the following questions. Each question carries Products A, B & C are produced from single raw material input. The

(a)

Highlight the correct answers for the following questions. Each question carries

Products A, B & C are produced from single raw material input. The raw material costs are $90,000 from which 5,000 units of A, 10,000 units of B and 15,000 units of C can be produced each period. ProductA can be sold at the split off point for $2/unit, or it can be processed further at a cost of $12,500 & then sold for $5/unit What is the correct course of action regading Product A?

It should be sold at the split-off point, since further processing would result in a loss of .50/unit
It should be processed further, since this will increase profits by $2,500 each period
It should be sold at the split-off point, since further processing will result in a loss of $2,500 each period
It should be processed further, since this will increase proifts by $12,500 each period

1b) Whatis a joint product?

Any product that consists of several parts
Any product produced by a firm with more that one product line
Any product involved in a make or buy decision
One of several proucts from a common input

1c) The Lantern Corp has 1,000 obsolete lanterns that are carried in Inventory with a mg cost of

$20,000. If the lanterns are re-machined for $5,000, they could be sold for $9,000

Alternatively the lanterns could be sold for scrap for $1,000 Which alternative is more desirable.

& what are the total relevant costs for that alternative?

Re-machine & $5,000
Re-machine & $25.000
Scrap & $20,000
Scrap & $19.000

1d) Deciding what to do with a product from the split-off point forward is known as a

A) Joint Cost Analysis

B)Gross Margin Analysis

C) Sell or Process further decision

D) CVP Analysis

1e) An example of an Industry where a # of end products are produced from a single raw material input

Publishing
Petroleum refining
Hospitality

Furniture

B) WP Company produces products X,Y & Z from a single raw material input in a joint production process.

Budgeted data for the next month is as follows:

C) Benjamin Signal Co produces products R,J & C from a joint production process. Each product may be sold at the split-off pint or be processed further. Joint product costs of $92,000 per year are allocated to the products based on the relative # of units produced. Data is shown below:

Required: Which products) should be processed beyond the split-oft

Show your calculations

Answer below:

The cost of the joint raw material input is $149,000. Which of the products should be processed beyond the split-off pint? (Show Calculations.) Product R can be processed beyond the split-off point for an additional cost of $26,000 \& can then be sold for $105,000 Product J can be proecessed beyond the split-off point for an additional cost of $38,000 \& can then be sold for $117,000 Product C can be processed beyond the sipit-off point for an additional $12,000& can then be sold for $57,000