Aladdin has a production facility that produces carpets, wool costs $200,000 and separation process costs $90,000 for a total joint costs of $290,000. At the split off point there are three products French; Mediterranean and Welsh. French has a sales value of $120,000; Mediterranean has a sales value of $150,000 and Welsh has a sales value of $60,000.

All products can be sold as it this point. However, there are opportunities to process all three products further at the following costs: French $50000; Mediterranean $60000 and Welsh $10000.

This will increase the sales values of the products to: French $160,000; Mediterranean $240,000 and Welsh $90,000.

Required:

Which product or products should be at the split off point and which product or products should be processed further?

Aladdin has a production facility that produces carpets, wool costs $200,000 and separation process costs $90,000 for a total joint costs of $290,000. At the split off point there are three products French; Mediterranean and Welsh. French has a sales value of $120,000; Mediterranean has a sales value of $150,000 and Welsh has a sales value of $60,000.

All products can be sold as it this point. However, there are opportunities to process all three products further at the following costs: French $50000; Mediterranean $60000 and Welsh $10000.

This will increase the sales values of the products to: French $160,000; Mediterranean $240,000 and Welsh $90,000.

Required:

Which product or products should be at the split off point and which product or products should be processed further?