Question
Benjamin Signal Company produces products R, J, C from a joint process. Each product may be sold at the split off point or be processed
Benjamin Signal Company produces products R, J, C from a joint process. Each product may be sold at the split off point or be processed further. Joint production costs of $92,000 are allocated to the products based on the relative number of units produced.
Data for the current year operations follow:
Product | Units Produced | Allocated Joint Production Cost | Sales Value at Spit off |
R | 8,000 | $ 32,000 | $ 76,000 |
J | 10,000 | $ 40,000 | $ 71,000 |
C | 5,000 | $ 20,000 | $ 48,000 |
Product R can be processed beyond the split off point for an additional cost of $26,000 and can then be sold for $105,000.Product J can be processed beyond the split off point for an additional $38,000 and then sold for $117,000.Product C can be processed beyond the split off point for an additional $12,000 and then sold for $57,000.
Required:
Which products should be processed beyond the split off point? Show the calculations.
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