Question
Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 a year. The company allocates
Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 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 16,800 $ 24,000 Product Y 16,800 $ 24,000 Total 33,600 $ 48,000 $ 15,000 $ 18,700 $ 33,700 $ 35,500 $ 45,100 $ 80,600 What is the financial advantage (disadvantage) for the company of processing Product Y beyond the split-off point? Multiple Choice $9,600
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