Question
Please help with the below question. Cows Creamery Company makes two products from a common input. Joint processing costs up to the split-off point total
Please help with the below question.
Cows Creamery 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:
.................................................Gooey Mooey............Wowie Cowie...........Total
Allocated joint processing costs........$22,000....................$19,600......................$42,000
Sales value at split-off joint................$32,000....................$28,000......................$60,000
Costs of further processing................$11,600....................$25,300......................$36,900
Sales value after further processing...$40,800..................$54,200........................$95,000
Required:
1)What is the net monetary advantage (disadvantage) of processing Gooey Mooey beyond the split-off point?
2)What is the net monetary advantage (advantage) of processing Wowie Cowie beyond the split-of point?
3)What is the minimum amount the company should accept for Gooey Mooey if it is to be sold at the split-off point?
4)What is the minimum amount the company should accept Wowie Cowie if it is to be sold at the split-off point?
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