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KGHM Polska Mied S.A. uses a joint process to produce products E, F, G, and H. Each product may be sold at its split-off point

KGHM Polska Miedź S.A. uses a joint process to produce products E, F, G, and H. Each product may be sold at its split-off point or processed further. Joint processing costs for a single batch of joint products are $80,000. Other relevant data are as follows:

ProductSales Value At Split-OffAdditional Costs of ProcessingSales Value of Final Product
E$25,000$30,000$70,000
F35,00022,00057,000
G28,00026,00065,000
H18,00015,00033,000

Requirements:

  1. Analyze the profitability of further processing Product E.
  2. Calculate the net benefit of processing Product F beyond the split-off point.
  3. Allocate the joint costs to each product using the physical units method.
  4. Prepare a segment income statement for each product.

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