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Create an Excel spreadsheet to assist with sell-or-process-further decisions by identifying the relevant revenue, cost, and income effects. Prepare an analysis to help it make
Create an Excel spreadsheet to assist with sell-or-process-further decisions by identifying the relevant revenue, cost, and income effects.
Prepare an analysis to help it make decisions about whether to sell joint products at the split-off point or process them further.
x | y | total | x | ya | total | differential effects | |
revenues | $90,000 | $30,000 | $120,000 | $90,000 | $80,000 | $170,000 | $50,000 |
Joint costs | $100,000 | $100,000 | |||||
Separable costs | 40,000 | 40,000 | 40,000 | ||||
Total costs | $100,000 | $140,000 | $40,000 | ||||
Income affects | $20,000 | $30,000 | $10,000 |
1. How should the $117,000 be allocated to the three products?
2. Is the company currently making the right processing decision? Explain.
3. If the company alters its processing decisions, what would be the expected combined operating income from the three products?
4.
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