TB Problem Qu. 13-203 (Algo) Ibsen Company makes two products from a common...

Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $48,500 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	$ 29,100	$ 19,400	$ 48,500
Sales value at split-off point	$ 30,000	$ 20,000	$ 50,000
Costs of further processing	$ 24,800	$ 19,100	$ 43,900
Sales value after further processing	$ 49,000	$ 59,500	$ 108,500

Required:

a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.)

b. What is financial 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?