Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare

Question

Wexpro, Inc., produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $26,000 per ton, one-fourth of which is allocated to product X15. 6,000 units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $15.00 each, or processed further at a total cost of $11,000 and then sold for $20.00 each.

A. Should be processed further.

B. Should be sold at the split off point.

Required: Should product X15 be processed further or sold at the split-off point?

Explanation / Answer

The product shoud be processed further

Material and Processing cost          6,500 Unit produced          6,000 split off point revenue       90,000 Profit at this stage       83,500 Processing cost       11,000 Total cost       17,500 Revenue     120,000 Profit after processing     102,500

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

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