KENTUCKY CORPORATION KENTUCKY Corporation makes two products, X and Y, from a joint input that have the following information:

	Units Produced	Sales Value per unit at split-off point	total additional processing costs	sales value per unit after additional processing
product X	50,000	$10	$400,000	$15
Product Y	30,000	$8	$300,000	$20

The joint cost incurred to produce the two products up to the current point is $600,000. Required:

1. Which cost is sunk in this situation? Why?
2. The point at which two joint products become identifiable as separate products is known as:
3. Which products should be processed further? Show your computation.
4. Assume that for the purposes of determining profit and loss, $300,000 of the joint cost is allocated to Product X and that it will be processed further. What would be the total gross profit on sales of Product X?