Lumiere Manufacturing Limited produces three products from a single output. Joint processing costs up to the split off point total $350,000. The company allocates these costs based on the sales values at the split off point which are:

Product D $240,000

Product K $160,000

Product M $100,000

Each product can be processed further after the split off point and the following are the costs and sales if they are processed further:

Additional Sales value

Processing costs after further processing

Product D $63,000 $300,000

Product K 80,000 260,000

Product M 36,000 128,000

Required:

Which products should be sold at the split off point and which should be processed further. Explain your answer and show your work.