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Gmail, 3G @ 38% 8:51 AM o eclass.bethlehem.edu Megan Company produces 2 products, X and Y, from the same production process with joint product costs
Gmail, 3G @ 38% 8:51 AM o eclass.bethlehem.edu Megan Company produces 2 products, X and Y, from the same production process with joint product costs of $360,000 per month. The 2 products can be sold at the split off point or processed further and then sold. Separable production costs are incurred for each product after the split-off point. The firm has always processed both products further to maximize the revenue involved. All joint costs are allocated to the 2 products on the basis of their relative sales value. Unit selling prices and total monthly production at the split-off point are: Product Monthly Production Selling Price X 15.000 pounds $16 per pound 20.000 pounds Spar pound The additional processing costs and selling prices after the split-off point are: Product Additional Processing Costs Selling Price 590,000 520 per pound $100,000 SiS per pound A summarized version of the company's operating performance for the past month shows the following Y x Y Total $300.000 $300,000,000 Revenue 15.000 pounds X 520 20,000 pounds X 515 Separable costs 15.000 pounds x 50 20.000 pounds X 55 Joint product costs located by over $300.000 X ($300.000/5000.000 5360.000 X (5300,000/3600,000 Gross Pro $90,000 $100.000 150.000 $180.000 $180,000 $360,000 $30.000 520.000 550.000 Required: A. If the firm sold both products at the split-off point, how much gross profit would be earned? B. Evaluate the joint product costing approach used by Megan Company. Do you agree or disagree with what was done? C. How much gross profit could the company have earned if it had chosen correctly between selling at the split-off point and after further processing
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