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Forest Products, Incorporated, manufactures three products ( FP - 1 0 , FP - 2 0 , and FP - 4 0 ) from a
Forest Products, Incorporated, manufactures three products FP FP and FP from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $ Additional information follows:
Product Units Produced Sales Values Processing Costs After SplitOff
FP $ $
FP
FP
The sale of FP has been banned by a recent law. If FP is produced, disposal in an approved manner costs $ for every units produced.
Required:
Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP and FP What joint costs would be allocated to FP and FP
There is a possibility that a market for FP and FP at splitoff will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value at splitoff would Forest Products be indifferent between selling them at splitoff and processing them further?
At what sales value at splitoff would Forest Products be indifferent between selling them at splitoff and processing them further, in case the disposal cost for FP increases to $ for every units of FP produced?
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