Two products, QI and VH, emerge from a joint process. Product QI has been alloca

Question

Two products, QI and VH, emerge from a joint process. Product QI has been allocated $9,600 of the total joint costs of $12,000. A total of 9,000 units of product QI are produced from the joint process. Product QI can be sold at the split-off point for $13 per unit, or it can be processed further for an additional total cost of $54,000 and then sold for $18 per unit. If product QI is processed further and sold, what would be the financial advantage (disadvantage) for the company compared with sale in its unprocessed form directly after the split-off point? ($18,600) $108,000 $600 ($9,000)

Explanation / Answer

Revenue if processed further 162000 =9000*18 Revenue if sold at the split-off point 117000 =9000*13 Incremental revenue 45000 Additional total costs 54000 Financial advantage (disadvantage) -9000 Option 4 is correct

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

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