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Ibsen Company makes two products from a common input. Joint processing costs up to the...

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Accounting

Ibsen Company makes two products from a common input. Joint processing costs up to the split-off point total $49,700 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

Product X Product Y Total
Allocated joint processing costs $ 19,300 $ 30,400 $ 49,700
Sales value at split-off point $ 24,050 $ 38,050 $ 62,100
Costs of further processing $ 23,800 $ 18,100 $ 41,900
Sales value after further processing $ 47,000 $ 57,500 $ 104,500

Required:

a. What is financial advantage (disadvantage) of processing Product X beyond the split-off point? (Negative amount should be indicated by a minus sign.)

b. What is financial advantage (disadvantage) of processing Product Y beyond the split-off point? (Negative amount should be indicated by a minus sign.)

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