SELLORP-961 company manufactures three products from a common input in a joint processing operation. Joint...
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Accounting
| SELLORP-961 company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $98,000 per quarter. The company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows:
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| Product | Selling Price | Quarterly Output | |||||||||||
| A | $ | 4 | per pound |
| 10,000 | pounds | |||||||
| B | $ | 7 | per pound |
| 22,000 | pounds | |||||||
| C | $ | 13 | per gallon |
| 5,000 | gallons | |||||||
| Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: | |||||||||||||
| Product | Additional Processing Costs | Selling Price |
| ||||||||||
| A | $ | 53,000 |
| $ | 7 | per pound |
| ||||||
| B | $ | 38,000 |
| $ | 11 | per pound |
| ||||||
| C | $ | 18,000 |
| $ | 19 | per gallon |
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|
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Which products should be processed further?
Multiple Choice
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A and C
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A, B, and C
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B and C
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A and B
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