A company produces three different products from a joint process. The joint costs to produce...
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A company produces three different products from a joint process. The joint costs to produce Products A, B, and C are $30,000. Product A is allocated $15,000 of this joint cost, while Product B is allocated $10,000 and Product C is allocated $5,000. Each product can be sold at the split-off point as follows: Product A Product B Product C Number of units 1,000 500 250 Selling price per unit $30 $25 $30 The company is considering processing Product A further and selling it for $40 per unit. The additional processing could be done within the existing facilities of the company. The total additional costs of processing it further includes direct labor of $4,000 and variable overhead of $3,000. Additionally, fixed overhead of $6,000 would be allocated to the product. Should Product A be processed further?
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