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Omega Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split-off point. They can either be
Omega Corporation manufactures three products from a joint process. The three products are in industrial grade form at the split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this process is as follows: Product 1 Sales Price at split-off point: $16 Allocated joint costs: $6,000 Sales Price after further processing: $20 Cost of further processing: $6,570 Product Quantity: 1,000 pounds Product 2 Sales Price at split-off point: $12 Allocated joint costs: $6,000 Sales Price after further processing: $18 Cost of further processing: $2,500 Product Quantity: 1,000 pounds Product 3 Sales Price at split-off point: $5 Allocated joint costs: $6,000 Sales Price after further processing: $14 Cost of further processing: $2,810 Product Quantity: 1,000 pounds Q. What would be the additional amount of profit that Omega Corporation would gain from further processing the products) that is/are more profitable to process further rather than be sold at the split-off point?
Omega Corporation manufactures three products from a joint process. The three products are in industrial grade form at the
split-off point. They can either be sold at that point or processed further into premium grade. Costs related to each batch of this
process is as follows:
Product 1
Sales Price at split-off point: $16
Allocated joint costs: $6,000
Sales Price after further processing: $20
Cost of further processing: $6,570
Product Quantity: 1,000 pounds
Product 2
Sales Price at split-off point: $12
Allocated joint costs: $6,000
Sales Price after further processing: $18
Cost of further processing: $2,500
Product Quantity: 1,000 pounds
Product 3
Sales Price at split-off point: $5
Allocated joint costs: $6,000
Sales Price after further processing: $14
Cost of further processing: $2,810
Product Quantity: 1,000 pounds
Q. What would be the additional amount of profit that Omega Corporation would gain from further processing the products) that is/are more profitable to process further rather than be sold at the split-off point?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
