refer to riley company. which products will be processed further? Riley Company

Question

refer to riley company. which products will be processed further?

Riley Company produces two products from a joint process: A and C. Joint processing costs for this produ $9,000. Sales price per yard at split-off $7.00 10.00 DisposalFurther cost per yard split-off $4.50 Final sale at processing Yards 1,800 2, 600 per yard $1.50 3.50 price per yard s 8.00 12.25 6.00 If A and C are processed further, no disposal costs will be incurred or such costs will be borne by the buyer 31. Refer to Riley Company. Using a phvsical measure what amount of ioint processine cost is allcated to rodu

Explanation / Answer

A C Sales price after processing 8 12.25 Sales price at split off point 7 10 Incremental revenue 1 2.25 Processing costs 1.5 3.5 Incremental income(loss) -0.5 -1.25 A and C should not be processed further

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