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ywiec S.A. uses a joint process to produce products Y, Z, AA, and BB. Each product may be sold at its split-off point or processed
Żywiec S.A. uses a joint process to produce products Y, Z, AA, and BB. Each product may be sold at its split-off point or processed further. Joint processing costs for a single batch of joint products are $100,000. Other relevant data are as follows:
Product | Sales Value At Split-Off | Additional Costs of Processing | Sales Value of Final Product |
---|---|---|---|
Y | $29,000 | $34,000 | $75,000 |
Z | 40,000 | 26,000 | 68,000 |
AA | 33,000 | 28,000 | 60,000 |
BB | 19,000 | 21,000 | 45,000 |
Requirements:
- Analyze the profitability of processing Product Y further beyond the split-off point.
- Determine the incremental profit from further processing Product Z.
- Allocate joint costs using the sales value at split-off method.
- Prepare a segment reporting statement for Żywiec S.A.
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