Question
A manufacturing company makes two products.Up to the split-off point of Products F and G, joint process costs are $47,700 a year. Joint costs are
A manufacturing company makes two products.Up to the split-off point of Products F and G, joint process costs are $47,700 a year. Joint costs are allocated to the products based on their total sales values at the split-off point. Both products may be sold at the split-off point or processed further.
Product FProduct GTotalAllocated joint processing costs$18,600$29,100$47,700Sales value at split-off point$25,750$37,700$63,450Costs of further processing$23,100$17,400$40,500Sales value after further processing$48,400$56,100$104,500
Required:
a.Calculate the financial advantage (disadvantage) of processing Product F beyond the split-off point.(Negative amount should be indicated by a minus sign.)
b. Calculate the financial advantage (disadvantage) of processing Product G beyond the split-off point.(Negative amount should be indicated by a minus sign.)
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