Question
Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales values of
Walman Corp. manufactures products X, Y, and Z from a joint production process. Joint costs are allocated to products based on relative sales values of the products at the split-off point. Additional information is as follows:
Units Produced
X - 15,000
Y - 11,000
Z - 7,000
Total 33,000
Allocated joint costs
X - $195,200
Y - $109,800
Z - $85,400
Total - $390,400
Sales value at split-off
X- ?
Y - 180,000
Z - 140,000
Total - 640,000
Additional costs for further processing
X - 41,000
Y- 33,000
Z- 24,000
Total - 98,000
Sales value if processed further
X - 326,000
y- 223,000
Z - 185,000
Total - 734,000
Based solely on a relevant cost analysis, which of the three products should be processed by Walman beyond the split-off point?
- Only X
- Only Y
- Only Z
- Only Y and Z
- All three products: X,Y and Z
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