Iaukea Company makes two products from a common input. Joint processing costs up

Question

Iaukea Company makes two products from a common input. Joint processing costs up to the split-off point total $45,100 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:

Required:

What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point? (Input the amount as a positive value. Omit the "$" sign in your response.)

What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? (Input the amount as a positive value. Omit the "$" sign in your response.)

Product X Product Y Total   Allocated joint processing costs $ 17,900    $ 27,200    $ 45,100      Sales value at split-off point $ 25,400    $ 37,000    $ 62,400      Costs of further processing $ 22,400    $ 16,700    $ 39,100      Sales value after further processing $ 47,000    $ 54,700    $ 101,700   

Explanation / Answer

Hi,

Please find the answers as follows:

Thanks.

Product X Amount Sales value after further processing (A) 47000 Sales value at split-off point (B) 25400 Net Increase in Sales (A-B)
21600 Less Costs of further processing 22400 Net monetary disadvantage -800

Product Y Amount Sales value after further processing (A) 54700 Sales value at split-off point (B) 37000 Net Increase in Sales (A-B) 17700 Less Costs of further processing 16700 Net monetary advantage 1000

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.