A company produces two products in a joint process, Z8 and W9. The cost of...
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A company produces two products in a joint process, Z8 and W9. The cost of producing Z8 and W9 is $3881 per batch. Additional information relating to the production of products Z8 and W9 is given below:
|
| Z8 | W9 |
| Number of units | 600 | 340 |
| Selling price per unit at the split-off point | $8.00 | $13.10 |
Product W9 can be processed further into product W10 at a cost of $940. 340 units of W9 will produce 203 units of W10, which can then be sold for $24.17 per unit.
What is the incremental benefit of processing further?
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