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Bowen Company produces products P, Q, and R from a joint production process. Each product may be sold at the split-off point or be processed
Bowen Company produces products P, Q, and R from a joint production process. Each product may be sold at the split-off point or be processed further. Joint production costs of $91,000 per year are allocated to the products based on the relative number of units produced. Data for Bowen's operations for the current year are as follows: Units Produced Allocated Joint Production Value Sales Value at Split-off Product P 4,000 $28,000 $38,000 Q 7,000 49,000 47,000 R 2,000 14,000 16,000 Product P can be processed beyond the split-off point for an additional cost of $10,000 and can then be sold for $50,000. Product Q can be processed beyond the split-off point for an additional cost of $30,000 and can then be sold for $65,000. Product R can be processed beyond the split-off point for an additional cost of $12,000 and can then be sold for $25,000. Required: Which products should be processed beyond the split-off point? Show all calculations
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