Q5 Icy 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:

product x product Y Total

Allocated joint processing costs........$22,400....................$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:

a) What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?

b) What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?

c) What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d) What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?