QUESTION $4$

A company manufactures three products using the same production process. The costs incurred

up to the split$-$off point are RM$200,000.$ These costs are allocated to the products on the basis of

their sales value at the split$-$off point. The number of units produced, the selling prices per unit of

the three products at the split$-$off point and after further processing, and the additional processing

costs are as follow:

Number of Selling Price Selling Price Additional

Product Units Produced at Split$-$off after Processing Processing Costs

X $5,000$ RM$10\mathrm{.}00$ RM$15\mathrm{.}00$ RM$14,000$

Y $10,00011\mathrm{.}6016\mathrm{.}2021,000$

Z $4,00019\mathrm{.}4021\mathrm{.}6012,000$

Instructions

$($a$)$ Which product$($s$)$ should be processed further and which should be sold at the split$-$off

point?

$($b$)$ Would your decision be different if the company was using the quantity of output to

allocate joint costs? Explain.