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Question 6 Mitchener Corp. manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $860,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are: Sales Value Further Sales Value Product at Split-Off Processing After Further Costs Processing M $350,000 $ 90,000 $420,000 N 185,000 60,000 260,000 P 325,000 115,000 450,000 The "Further Processing Costs" consist of variable and avoidable fixed costs. INSTRUCTIONS Determine which product or products should be sold at the split-off point, and which product or products should be processed further? When complete, answer each of the following by selecting the correct match from the list provided. A. v What is the incremental revenue for Product M? A. $15,000 What is the incremental income (loss) for Product M? B. $(20,000) What is the incremental revenue for Product N? C. $125,000 F. v What is the incremental income (loss) for Product N? D. N and P What is the incremental revenue for Product P? E. $70,000 B. v What is the incremental income (loss) for Product P? F. $10,000 D. v Which of the product or products, should be processed further? G. $75,000