Exercise 11-13 (Algo) Sell or Process Further Decision [LO11-7]

Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $72,000 per ton, one-fourth of which is allocated to product X15. Eight thousand four hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $16 each, or processed further at a total cost of $10,000 and then sold for $19 each.

Required:

1. What is the financial advantage (disadvantage) of further processing product X15?

2. Should product X15 be processed further or sold at the split-off point?