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Sebastian Manufacturing Limited produces three products from a single output. Joint processing costs up to the split off point total $200,000. The company allocates these
Sebastian Manufacturing Limited produces three products from a single output. Joint processing costs up to the split off point total $200,000. The company allocates these costs based on the sales values at the split off point which are: Product D $75,000 Product K $150,000 Product M $250,000 Each product can be processed further after the split off point and the following are the costs and sales if they are processed further: Additional Sales value Processing costs after further processing Product D $55,000 $140,000 Product K 30,000 225,000 Product M 50,000 290,000 Required: Which products should be sold at the split off point and which should be processed further. Explain your answer and show your work
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