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	$	25,750	$	37,700	$	63,450
Costs of further processing	$	23,100	$	17,400	$	40,500
Sales value after further processing	$	48,400	$	56,100	$	104,500

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.)

Solutions

Expert Solution

Answer to this is attached in snip. Please let me know if you have any question on this. Best wishes,

ekkarill92 answered 11 months ago

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