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Milton Company manufactures three products as part of a joint process: A1, B1, and C1. Joint costs up to the split-off point total $24,000. The
Milton Company manufactures three products as part of a joint process: A1, B1, and C1. Joint costs up to the split-off point total $24,000. The joint costs are allocated in proportion to their relative sales values. At the split-off point, product A1 can be sold for $30,000, product B1 can be sold for $50,000 and product C1 can be sold for $20,000. Product A1 can be processed further to make product A2, at an incremental cost of $18, 000. A2 can be sold for $54,000. Product B1 can be processed further to make product B2, at an incremental cost of $38,000. B2 can be sold for $85,000. Product C1 can be processed further to make product C2, at an incremental cost of $12,000. C2 can be sold for $34,000. (i). Joint costs allocated to product A1 total: Select one: O a. $24,000. O b. $4,800. O c. $7,200. d. $12,000. o . Milton Company manufactures three products as part of a joint process: A1, B1, and C1. Joint costs up to the split-off point total $24,000. The joint costs are allocated in proportion to their relative sales values. At the split-off point, product A1 can be sold for $30,000, product B1 can be sold for $50,000 and product C1 can be sold for $20,000. Product A1 can be processed further to make product A2, at an incremental cost of $18, 000. A2 can be sold for $54,000. Product B1 can be processed further to make product B2, at an incremental cost of $38,000. B2 can be sold for $85,000. Product C1 can be processed further to make product C2, at an incremental cost of $12,000. C2 can be sold for $34,000. (ii) The net change in operating income resulting from a decision to manufacture A2 is: Select one: O a. $36,000 O b. $6,000 O c. $24,000 O d. $28,800
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