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Mitchener Corp, manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $440,000 per
Mitchener Corp, manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $440,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off point. Each product may be sold at the split-off point or processed further. The additional processing costs and sales value after further processing for each product (on an annual basis) are: Product Sales Value at Split-Off M N P $110,000 170,000 160,000 Further Processing Costs $ 50,000 Sales Value After Further Processing $175,000 235,000 215,000 75,000 45,000 The "Further Processing Costs" consist of variable and avoidable fixed costs INSTRUCTIONS Determine which product or products should be sold at the split-off point, and which product or products should be processed further? When complete, answer each of the following by selecting the correct match from the list provided. What is the incremental revenue for Product M? What is the incremental income (loss) for Product M? What is the incremental revenue for Product N? What is the incremental income (loss) for Product N? What is the incremental revenue for Product P? What is the incremental income (loss) for Product P? Which of the product or products, should be processed further? A. M and P B. $10,000) C. $65,000 D. $65,000 E. $15,000 F. $10,000 G. $55,000
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