Larsen Company makes two products from a common input. Joint processing costs up
ID: 2417594 • Letter: L
Question
Larsen Company makes two products from a common input. Joint processing costs up to the split-off point total $47,800 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:
Product X
Product Y
Total
Allocated joint processing costs
23,900
23,900
47,800
Sales value at split-off point
33,200
33,200
66,400
Costs of further processing
21,000
21,600
42,600
Sales value after further processing
52,700
60,400
113,100
What is the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?(Input a net disadvantage as a negative value. Omit the "$" sign in your response.)
b.
What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point?(Input a net disadvantage as a negative value. Omit the "$" sign in your response.)
Explanation / Answer
Additional Revenue-Additional Cost
X:
[$52,700-$33,200]-$21,000=-$1,500 disadvantage
Y;
[$60,400-33,200]-$21,600=$5,600 advantage
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.