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

Question

Kirk Minerals processes materials extracted from mines. The most common raw material that it processes results in three joint products: Spock, Uhura, and Sulu. 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 $179,000 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 Spock $210,900 $40,300 $109,700 $300,800 Uhura 300,000 59,400 84,900 399,700 Sulu 455,000 79,300 250,400 800,100 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).) Spock Uhura Sulu Incremental profit (loss) $ $ $ Indicate whether each of the three joint products should be sold as is, or processed further. Spock Uhura Sulu

Explanation / Answer

Spock Uhura Sulu Sales Value of Processed Product 300800 399700 800100 Sales Value at Split-Off Point 210900 300000 455000 Incremental revenue 89900 99700 345100 Cost to Process Further 109700 84900 250400 Incremental profit (loss) -19800 14800 94700 Spock- Sold as is Uhura - Process further Sulu-Process further

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