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laci Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 a year. The company allocates
laci Company makes two products from a common input. Joint processing costs up to the split-off point total $42,000 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 Product XProduct Y Total $22,000 $19,600 $42,000 $32,000 $28,000 $60,000 $11,600 $25,300 $36,900 Sales value after further processing $40,800 $54,200 $95,000 Required: a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? b) What is the net monetary 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?
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