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 $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 the net monetary advantage (disadvantage) of processing Product X beyond the split-off point?(Input the amount as a positive value.)

b.	What is the net monetary advantage (disadvantage) of processing Product Y beyond the split-off point? (Input the amount as a positive value.)

c.	What is the minimum amount the company should accept for Product X if it is to be sold at the split-off point?

d.	What is the minimum amount the company should accept for Product Y if it is to be sold at the split-off point?

please show the process on how you find the answered. Thank you

Solutions

Expert Solution

Answer a

Net monetary advantage (disadvantage) of processing Product X beyond the split-off point

Profit = Sales value after further processing - Sales value at split-off point - Costs of further processing.

= $49,400 - $26,000 - $23,600 = ($200)

Answer b

Net monetary advantage (disadvantage) of processing Product Y beyond the split-off point

Profit = Sales value after further processing - Sales value at split-off point - Costs of further processing.

= $57,100 - $37,950 - $17,900 =$1,250

Answer c

Minimum amount the company should accept for Product X if it is to be sold at the split-off point

= Sales value at split-off point + Profit processing Product X beyond the split-off point

= $26,000 + ($200) = $25,800

Answer d

Minimum amount the company should accept for Product Y if it is to be sold at the split-off point

= Sales value at split-off point + Profit processing Product Y beyond the split-off point

= $37,950 + $1,250 = $39,200

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

ABC Company makes two products from a common input. Joint processing costs up to the split-off...

ABC 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 A Product B 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 $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 processing costs up to the split-off point total $50,500 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 $ 30,300 $ 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...

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

Cows Creamery 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: Gooey Mooey Wowie Cowie Total Allocated Joint processing costs $22,000 $19,600 $41,600 Sales value at split-off point $32,000 $28,000...

Gutten company makes three products from a common input in a joint processing operation. Joint processing...

Gutten company makes 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: Product Selling Price Quarterly Output A $ 5 per pound 10,000 pounds B $ 7 per pound 22,000 pounds C...

Subjects