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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:
Product | Sales Value At Split-Off | Additional Costs of Processing | Sales Value of Final Product |
---|---|---|---|
E | $25,000 | $30,000 | $70,000 |
F | 35,000 | 22,000 | 57,000 |
G | 28,000 | 26,000 | 65,000 |
H | 18,000 | 15,000 | 33,000 |
Requirements:
- Analyze the profitability of further processing Product E.
- Calculate the net benefit of processing Product F beyond the split-off point.
- Allocate the joint costs to each product using the physical units method.
- Prepare a segment income statement for each product.
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