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Profit from Processing Further Deaton Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative
Profit from Processing Further Deaton Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative sales value of the products at the split-off point. Additional information for Deaton Corporation follows: Units produced Joint costs Sales value before additional processing Additional costs for further processing Sales value if processed further A 20,400 $ 244,800 408,000 47,600 476,000 B 13,600 $ 102,000 170,000 34,000 204,000 6,800 $ 61,200 102,000 20,400 119,000 Total 40,800 $ 408,000 680,000 102,000 799,000 Required: 2a. For each of the three products (A, B, and C), calculate the differential benefit (loss) from processing the product after the split-off point rather than selling the product at the split-off point. (Loss amounts should be indicated with a minus sign.) A B C Differential benefit (loss) 2b. Which, if any, of products A, B, and C should be processed further and then sold? Product A Product B Product C None of the above All of the above
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