Question
All three products have a Joint cost of 117,000. These products were processed further and sold as follows. Chemical Product Sales Additional Processing Costs A
All three products have a Joint cost of 117,000. These products were processed further and sold as follows.
Chemical Product Sales Additional Processing Costs
A 230000 190000
B 330000 300000
C 175000 100000
The company has had an opportunity to sell at split off directly to other processors. If that alternative had been selected, sales would have been A.54000 B 32000 C 54000
The company expects to operate at the same level of production and sales in the forthcoming year.
Could the company increase operating income by altering its processing decisions? If so, what would be the expected overall operating income?
Which products should be processed further and which should be sold at split-off?
Also please complete the table, I will rate this question high and give more points :)
| Chemical Product A | Chemical Product B | Chemical Product C | |||||||
| Sell at Split-Off | Process Further | Difference | Sell at Split-Off | Process Further | Difference | Sell at Split-Off | Process Further | Difference | |
| Revenues | |||||||||
| Cost Beyond Split-Off | |||||||||
| Income Effects | |||||||||
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