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WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month
WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows:
Product X | Product Y | Product Z | ||||
Units produced | 2,100 | 2,600 | 3,600 | |||
Per unit sales value at split-off | $ | 19.00 | $ | 25.00 | $ | 21.00 |
Added processing costs per unit | $ | 2.00 | $ | 4.00 | $ | 4.00 |
Per unit sales value if processed further | $ | 26.00 | $ | 26.00 | $ | 31.00 |
The cost of the joint raw material input is $74,000. Which of the products should be processed beyond the split-off point?
Product X | Product Y | Product Z | |
A) | yes | yes | no |
B) | yes | no | yes |
C) | no | yes | no |
D) | no | yes | yes |
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