WP Corporation produces products X, Y, and Z from a single raw material input in

Question

WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process Budgeted data for the next month is as follows: Product X Product Y Product z 4,100 $ 21.00 S 23.00 26.00 $ 5.007.00 $7.00 s 29.00 29.00 34.00 2, 600 Units produced Per unit sales value at split-off Added processing costs per unit Per unit sales value if processed further 3, 100 The cost of the joint raw material input is $89,000. Which of the products should be processed beyond the split-off point? Product x Product Y Product 2 A) B) C) D) yes yes no no yes no yes yes no yes no yes

Explanation / Answer

Answer b. Product X Y Z Sales Value if processed further         29.00         29.00         34.00 Less: Additional Processing Cost per Unit           5.00           7.00           7.00 Balance         24.00         22.00         27.00 Sales Value at Split off Point         21.00         23.00         26.00 Profit (loss) after further processing           3.00         (1.00)           1.00 Further Processing Yes No Yes

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