Question

In: Accounting

Stahl Inc. produces three separate products from a common process costing $100,900. Each of the products...

Stahl Inc. produces three separate products from a common process costing $100,900. 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 $59,300 $100,400 $189,600
Product 12 15,900 29,100 34,800
Product 14 54,500 149,900 214,400

Determine total net income if all products are sold at the split-off point.

Net income $Type your answer here

eTextbook and Media

  

  

Determine total net income if all products are sold after further processing.

Net income

  

  

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 $
Product 12 $
Product 14 $

  

  

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 $

Solutions

Expert Solution

req 1. Product 10 Product 12 Product 14 Total
Sales value at splitt off 59300 15900 54500 129700
Less: Joint cost 100900
Net income 28800
Req 2.
Product 10 Product 12 Product 14 Total
Sales after further processing 189600 34800 214400 438800
Less: Further processing cost 100400 29100 149900 279400
Net realisable value 89200 5700 64500 159400
Less: Joint cost 100900
Net Income 58500
Req 3.
Product 10 Product 12 Product 14 Total
Sales after further processing 189600 34800 214400 438800
Less: Sales value at splitt off 59300 15900 54500 129700
Incremental sales 130300 18900 159900 309100
Less: Further processing cost 100400 29100 149900 279400
Incremental Income 29900 -10200 10000 29700
Decision Further At Splitt Further
processing Off point processing
product 10 $ 29900 Further processed
Product 12 ($10200) At splitt of point
Product 14 $10000 Further processed
Req 4.
Product 10 Product 12 Product 14 Total
Sales value 189600 15900 214400 419900
Less: Further processing cost 100400 0 149900 250300
Net realisable value 89200 15900 64500 169600
Less: Joint cost 100900
Net Income 68700
Req 5.
Yes, the net Income has changed

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