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b. Pasture Company makes two products from a common input. Joint processing costs up to the split-off point total $43,200 a year. The company allocates
b. Pasture Company makes two products from a common input. Joint processing costs up to the split-off point total $43,200 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing Product X $25,600 $32,000 $15,900 $47,500 Product Y $17,600 $22,000 $17,400 $40,800 Total $43,200 $54,000 $33,300 $88,300 Required (show your calculations): , Which product(s) should be sold at the split-off point, and which product(s) should be processed further? (4 marks) ii. All traceable costs are relevant costs. Do you agree with this statement? Why or why not? (4 marks)
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