spinoff point total 365000 per querter For financial reporti

spin-off point total $365,000 per querter For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales velue at the split-off point. Unit selling prices and total output at the split-off point are as follows Company manufectures three products from a common input in a joint processing operation. Joint processing costs up to the Belling Price A 23.00 per pound 13,600 pounds S17.00 per pound 21,200 pounds Output 29.00 per Each product can be processed further after the split-off point Additional processing requires no special facilitles. The additional processing costs (per querter) and unit selling prices after further processing are given below Selling 28.40 per pound 23.40 per pound Pint 30,560 37.40 per gallon Required: 1 whet is the francial advantage (dsadvantage) of further processing each of the three products beyond the split-off point? products should be processed further? on your analysis In requirement 1, which product or products should be sold at the split-off point and which product or Complete this question by entering your answers in the t tabs below Required 2 ) of further processing each of the three products beyond the split-off a negative value.) cPre Next >

Solution

Calculate financing advantage (disadvantage)

Analysis :

	Product A	Product B	Product C
Sale price after further processing	28.40	23.40	37.40
Sale price at split off point	23	17	29
Incremental sale price	5.4	6.40	8.40
Quantity	13600	21200	4800
Incremental sales revenue	73440	135680	40320
Incremental cost	-78540	-113230	-50560
Incremental profit (loss)	-5100	22450	-10240