Question

Stahl Inc. produces three separate products from a common process costing $100,100. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period.

		Sales Value at Split-Off Point				Cost to Process Further				Sales Value after Further Processing
Product 10			$59,700				$100,100				$191,000
Product 12			15,800				30,800				34,700
Product 14			55,400				149,700				214,000

Calculate incremental profit/(loss) and determine which products should be sold at the split-off point and which should be processed further. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Product		Incremental profit (loss)		Decision
Product 10		$		Should be sold at the split-off pointShould be processed further
Product 12		$		Should be processed furtherShould be sold at the split-off point
Product 14		$		Should be processed furtherShould be sold at the split-off point

Determine total net income using the results from previous part.

Net income

$

Is the net income different from that determined in part (b)?

YesNo , net income is higherlower by $

Answer 1

Note : please comment down for any further clarifications.