Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $240,800. Additional information follows: Product FP-10 FP-20 FP-40 Units Produced 90,000 135,000 75,000 Sales Values $ 174,000 310,000 84,800 Processing Costs (After Split-Off) $ 28,800 108,800 24,800 The sale of FP-40 has been banned by a recent law. If FP-40 is produced, disposal in an approved manner costs $120,000 for every 75,000 units produced.

Required:

a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP-10 and FP-20. What joint costs would be allocated to FP-10 and FP-20?

b. There is a possibility that a market for FP-10 and FP-20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further?

c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, in case the disposal cost for FP-40 increases to $150,000 for every 75,000 units of FP-40 produced?

Forest Products, Incorporated, manufactures three products (FP-10, FP-20, and FP-40) from a single, joint input. None of the products can be sold without further processing. In November, joint product costs were $240,800. Additional information follows: The sale of FP. 40 has been banned by a recent law. If FP. 40 is produced, disposal in an approved manner costs $120.000 for every 75,000 units produced. Required: a. Assuming that Forest Products continues to use the physical quantities method of allocation and to manufacture and sell FP.10 and FP.20. What joint costs would be allocated to FP.10 and FP-20? b. There is a possibility that a market for FP.10 and FP.20 at split-off will develop. In other words, it will be possible to sell the two products rather than process them further. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further? c. At what sales value (at split-off) would Forest Products be indifferent between selling them at split-off and processing them further, in case the disposal cost for FP.40 increases to $150,000 for every 75,000 units of FP.40 produced