Assume a company has three productsA, B, and Cthat emerge from a joint process. The...
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Accounting
Assume a company has three productsA, B, and Cthat emerge from a joint process. The selling prices and outputs for each product at the split-off point are as follows:
| Product | Selling Price | Output | ||
|---|---|---|---|---|
| A | $ 33 | per pound | 14,000 | pounds |
| B | $ 29 | per pound | 18,000 | pounds |
| C | $ 24 | per pound | 19,000 | pounds |
Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows:
| Product | Additional Processing Costs | Selling Price | |
|---|---|---|---|
| A | $ 66,000 | $ 37 | per pound |
| B | $ 73,500 | $ 34 | per pound |
| C | $ 78,500 | $ 30 | per pound |
What is financial advantage (disadvantage) of further processing if the company decides to further process all three products?
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