Chen Minerals processes materials extracted from mines. The most common raw mate

Question

Chen Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Larco, Marco, and Narco. Each of these products can be sold as is, or each can be processed further and sold for a higher price. The company incurs joint costs of $179,358 to process one batch of the raw material that produces the three joint products. The following cost and sales information is available for one batch of each product. Sales Value at Split-Off Point Allocated Joint Costs Cost to Process Further Sales Value of Processed Product Larco $219,682 $40,136 $110,143 $299,834 Marco 300,059 60,056 84,867 399,553 Narco 405,632 79,166 249,431 800,642 Collapse question part (a) Determine the incremental profit or loss that each of the three joint products. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Larco Marco Narco Incremental profit (loss) $ $ $

Explanation / Answer

(a) Calculation fs incremental profit or loss if not further processed

Larco Marco Narco Incrementalsales value after processed 80152 99494 395010 Less: further processing cost 136110 84867 166249 Incremental profit/(loss) (55958) 14627 228761

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