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 $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......................$41,600

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?