Exercise 7-10 (Video)

Stahl Inc. produces three separate products from a common process costing $100,900. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period.

		Sales Value at Split-Off Point				Cost to Process Further				Sales Value after Further Processing
Product 10			$59,300				$100,400				$189,600
Product 12			15,900				29,100				34,800
Product 14			54,500				149,900				214,400

Determine total net income if all products are sold at the split-off point.

Net income

$

LINK TO TEXT

Determine total net income if all products are sold after further processing.

Net income

$

LINK TO TEXT

Calculate incremental profit/(loss) and determine which products should be sold at the split-off point and which should be processed further. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Product		Incremental profit (loss)		Decision
Product 10		$		Should be sold at the split-off pointShould be processed further
Product 12		$		Should be sold at the split-off pointShould be processed further
Product 14		$		Should be sold at the split-off pointShould be processed further

LINK TO TEXT

Determine total net income using the results from previous part.

Net income

$

Is the net income different from that determined in part (b)?

NoYes

, net income is

higherlower

by $