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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $46,000 a year. The company allocates
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $46,000 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 $ 18,400 Product Y $ 27,600 Total $ 46,000 $ 20,000 $ 24,300 $ 30,000 $18,600 $ 50,000 $ 42,900 $ 38,000 $ 58,500 $ 96,500 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 b. c. Minimum acceptable amount d Minimum acceptable amount
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