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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: Total 25,200 Units produced Joint costs Sales value before additional processing Additional costs for further processing Sales value if processed further 12,400 $148,000 244,000 30,000 288,000 4,400 64,000 $40,000 $252,000 64,000 16,000 77,600 8,400 104,000 24,000 128,000 412,000 70,000 493,600 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.) 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
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