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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $44,000 a year. The company allocates these

Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $44,000 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 $ 17,600 $ 26,400 $ 44,000
Sales value at split-off point $ 20,000 $ 30,000 $ 50,000
Costs of further processing $ 23,900 $ 18,200 $ 42,100
Sales value after further processing $ 37,200 $ 57,700 $ 94,900

Required:

a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.)

b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point?

c. What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d. What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

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