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oblem 2 (7 points): The Oxnard Corporation processes a liquid component up to the splitoff...

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Accounting

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oblem 2 (7 points): The Oxnard Corporation processes a liquid component up to the splitoff point where two products, Mr. Dirtout and r. inklean, are produced and sold. There was no beginning inventory. The following material was collected for the month of January: Production: Mr . DirtOut Mr. SinkClean 147,500 gallons 95,000 gallons Sales: Mr. DirtOut Mr. SinkClean 140,500 at $110 per gallon 91,000 at $100 per gallon The cost of processing up to the splitoff point to yield a total of 242,500 gallons of good product was $380,000. Oxnard is evaluating the possibility of further processing the two products and selling them to an expanded set of customers at higher prices. The cost of processing Mr. DirtOut further is $42 per gallon and Mr. SinkClean is $39 per gallon. Mr. DirtOut can be sold after further processing for 159.50 per gallon and Mr. SinkClean for $133.99 per gallon. Should Oxnard process these products further? Required: Prepare an analysis to decide if Oxnard Corporation should process these products further or sell them as they are

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