Question
Iaukea Company makes two products from a common input. Joint processing costs up to the split-off point total $47,000 a year. The company allocates these
Iaukea Company makes two products from a common input. Joint processing costs up to the split-off point total $47,000 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below: |
Product X | Product Y | Total | ||||
Allocated joint processing costs | $ | 18,400 | $ | 28,600 | $ | 47,000 |
Sales value at split-off point | $ | 25,650 | $ | 37,400 | $ | 63,050 |
Costs of further processing | $ | 22,900 | $ | 17,200 | $ | 40,100 |
Sales value after further processing | $ | 48,000 | $ | 55,700 | $ | 103,700 |
Required: | |
a. | What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?(Input the amount as apositive value. Omit the "$" sign in your response.) |
Net(Click to select)advantagedisadvantage | $ |
b. | What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?(Input the amount as a positive value. Omit the "$" sign in your response.) |
Net(Click to select)disadvantageadvantage | $ |
c. | What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?(Omit the "$" sign in your response.) |
Minimum acceptable amount | $ |
d. | What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?(Omit the "$" sign in your response.) |
Minimum acceptable amount | $ |
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