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Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $45,000 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 $45,000 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 Product X $ 18,000 $ 20,000 $ 24,100 $ 37,600 Product Y $ 27,000 $ 30,000 $ 18,400 $ 58,100 Total $ 45,000 $ 50,000 $ 42,500 $ 95,700 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? C. Minimum acceptable amount d. Minimum acceptable amount
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