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Dowchow Corporation makes two products from a common input. Joint processing costs up to the split-off point total $38,400 a year. The company allocates these
Dowchow Corporation makes two products from a common input. Joint processing costs up to the split-off point total $38,400 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 Product Total llocated joint $20,80o $17,600 $38,400 processing costs Sales value at $26,000 $22,000 $48,000 split-off point Costs of further $22,600 $20,400 $43,000 processing Sales value after $45,000 $45,900 $90,900 further processing What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? o $1,600 O $22,400 O $27600 O ($3,600)
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