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 these
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:
| Product X | Product Y | Total | ||||
| Allocated joint processing costs | $ | 16,800 | $ | 16,800 | $ | 33,600 |
| Sales value at split-off point | $ | 24,000 | $ | 24,000 | $ | 48,000 |
| Costs of further processing | $ | 15,000 | $ | 18,700 | $ | 33,700 |
| Sales value after further processing | $ | 35,500 | $ | 45,100 | $ | 80,600 |
What is the financial advantage (disadvantage) for the company of processing Product Y beyond the split-off point?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Cost Accounting A Managerial Emphasis
Authors: Charles T Horngren
4th Edition
0131797395, 978-0131797390
