Question 1 Stahl Inc. produces three separate products from a common process cos

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Question 1 Stahl Inc. produces three separate products from a common process costing $100,500. Each of further and then sold for a higher price. Shown below are cost and selling price data for a recent period. the products can be sold at the split-off point or can be processed &? Sales Value at Split-Off Point Cost to ProcesS Further Product 10 Product 12 Product 14 Sales Value after Further Processing $190,200 34,200 214,800 $60,100 $100,300 29,200 15,500 54,100 151,000 Determine total net income if all products are sold at the split-off point. Net income s K TO VIDE Determine total net income if all products are sold after further processing Net income s 4.24.6.2 All Rights Res A Division of acBook Pro

Explanation / Answer

(a) Determine the total net income if all products are sold at the split-off point.
60,100 + 15,500 + 54,100 - 100,500 = $29,200 net income

(b) Determine the total net income if all products are sold after further processing.
190,200 + 34,200 + 214,800 - 100,500 - 100,300 - 29,200 - 151,000 = $58,200 net income

(c) Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further.
Product 10 190,200 - 100,300 - 60,100 = $29,800 gain, should
Product 12 34,200 - 29,200 - 15,500 = ($10,500) loss, shouldn't
Product 14 214,800 -151,000 - 54,100 = $9,700 gain, should

(d) Determine the total net income using the results from (c) $
190,200 + 15,500 + 214,800 - 100,500 - 100,300 - 151,000 = $68,700 net income

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