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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $52,000 a year. The company allocates
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $52,000 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: Allocated joint processing costs Sales value at split-off point Costs of further processing Sales value after further processing Required: Product X $ 20,800 Product Y Total $ 20,000 $ 23,100 $ 38,400 $ 31,200 $ 30,000 $ 17,400 $ 52,000 $ 50,000 $ 40,500 $ 56,100 $ 94,500 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? a. Financial disadvantage $ 4,700 b. Financial advantage $ 8,700 c. Minimum acceptable amount $ 20,800 d. Minimum acceptable amount $ 31,200
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