EXERCISE $12-7$ Sell or Process Further $[$L$07]$

Solex Company manufactures three products from a common input in a joint processing operation.

Joint processing costs up to the split$-$off point total $$100,000$ per year. The company allocates these

costs to the joint products on the basis of their total sales value at the split$-$off point. These sales

values are as follows: product $x,$$$50,000$; product $Y,$$$90,000$; and product $Z,$$$60,000.$

Each product may be sold at the split$-$off point or processed further. Additional processing

requires no special facilities. The additional processing costs and the sales value after further pro$-$

cessing for each product $($on an annual basis$)$ are shown below:

Required:

Which product or products should be sold at the split$-$off point, and which product or products

should be processed further? Show computations.