Question
In: Accounting
Product X and Y are made from a common input. Joint processing costs up to the...
Product X and Y are made from a common input. Joint processing costs up to the split-off point total $48,900 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 | $ | 19,100 | $ | 29,800 | $ | 48,900 | ||||
| Sales value at split-off point | $ | 26,000 | $ | 37,950 | $ | 63,950 | ||||
| Costs of further processing | $ | 23,600 | $ | 17,900 | $ | 41,500 | ||||
| Sales value after further processing | $ | 49,400 | $ | 57,100 | $ | 106,500 | ||||
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.)
A. financial advantage or disadvantage...input amount
B. financial advantage or disadvantage...input amount
Solutions
Expert Solution
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| Part a and b | |||
| Product X | Product Y | ||
| Sales value after further processing | a | $ 49,400 | $ 57,100 |
| Sales value at split-off point | b | $ 26,000 | $ 37,950 |
| Incremental Sale after split-off point | a-b=c | $ 23,400 | $ 19,150 |
| Costs of further processing | d | $ 23,600 | $ 17,900 |
| Incremental Income/(Loss) | c-d | $ -200 | $ 1,250 |
| Financial Advantage/(Disadvantage) | $ -200 | $ 1,250 | |
ekkarill92 answered 2 years agoRelated Solutions
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The company allocates these costs to the joint products on the
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product may be sold at the split-off point or processed further.
Data concerning these products appear below:
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Product B
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Allocated joint processing costs
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Iaci Company makes two products from a common input. Joint
processing costs up to the split-off point total $48,900 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
$
19,100
$
29,800
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48,900
Sales value...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint
processing costs up to the split-off point total $46,000 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
$
18,400
$
27,600
$
46,000
Sales value at split-off point...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint
processing costs up to the split-off point total $48,000 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
$
19,200
$
28,800
$
48,000
Sales value at split-off point...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint
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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
$
30,300
$
20,200
$
50,500
Sales value at split-off
point...
Iaci Company makes two products from a common input. Joint processing costs up to the split-off...
Iaci Company makes two products from a common input. Joint
processing costs up to the split-off point total $42,000 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
22,400
19,600
42,000
Sales value at split off
point
32,000
28,000 ...
bsen Company makes two products from a common input. Joint processing costs up to the split-off...
bsen Company makes two products from a common input. Joint
processing costs up to the split-off point total $51,500 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
$
30,900
$
20,600
$
51,500
Sales value at split-off
point...
Ibsen Company makes two products from a common input. Joint processing costs up to the split-off...
Ibsen Company makes two products from a common input. Joint
processing costs up to the split-off point total $47,700 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
$
18,600
$
29,100
$
47,700
Sales value at split-off
point...
bsen Company makes two products from a common input. Joint processing costs up to the split-off...
bsen Company makes two products from a common input. Joint
processing costs up to the split-off point total $53,700 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
$
20,400
$
33,300
$
53,700
Sales value at split-off
point...
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